November 20, 2015

India poised for one of highest growth in emerging Asia: OECD

Boosted by an improved business environment, Indian economy is projected to see "one of the highest levels" of growth among emerging Asian countries, a report by Paris-based think tank OECD said today.

Boosted by an improved business environment, Indian economy is projected to see “one of the highest levels” of growth among emerging Asian countries, a report by Paris-based think tank OECD said today.

While projecting an economic expansion of 7.2 per cent for this year and 7.3 per cent next year for India, OECD noted that large non-performing loan is a potential barrier to continued growth.

“Real growth in Emerging Asia is projected to average 6.5 per cent for 2015 and 6.2 per cent annually over 2016-20. Growth will continue to slow in China while remaining strong in India at one of the highest levels in the region,” the Organisation for Economic Cooperation and Development (OECD) said.

Emerging Asia refers to economies of Southeast Asia, China and India.

For the 2016-20 period, India’s average real GDP growth is anticipated to be 7.3 per cent, it said.

“Growth in the Association of Southeast Asian Nations (ASEAN) region is projected to average 4.6 per cent in 2015 and 5.2 per cent over 2016-20, led by growth in the Philippines and Vietnam among the ASEAN-5 and in the CLM (Cambodia, Lao PDR and Myanmar) countries.

“Private consumption will be a large contributor to overall growth,” OECD’s economic outlook report for Southeast Asia, China and India said.

The report was produced in cooperation with the United Nations Economic and Social Commission for Asia and the Pacific and the Asian Development Bank Institute.

According to the report, India is seeing increased investment rates, thanks to public infrastructure development and private investment motivated by improvements in the business environment, though passing some key structural reforms is proving difficult.

“Private consumption is also increasing, thanks in part to higher wages and improved benefits for public sector employees. Domestic financial risks remain potential barriers to continued growth in India, particularly large non-performing loans and the high leverage ratios of some firms,” it noted.

Further, the report said that business growth in Southeast Asia, China and India has been supported by FDI inflows to the region.

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