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Indian economy to grow 8.1% in 2011: UNCTAD

business Updated: Sep 06, 2011 17:02 IST

India's economic growth rate is likely to climb down to 8.1% in 2011 from 8.6% in the previous year due to slowdown in the global economy, the United Nations Conference on Trade and Development (UNCTAD) said in a report Tuesday.

According to the UNCTAD report, global economic growth is estimated to slow down to 3.1% in the current year from 3.9% in 2010.

The US economy is estimated to grow 2.3% in 2011 as against 2.9% in the previous year.

The UNCTAD's Trade and Development Report 2011 shows that the global economy is in bad shape and that its pace has been slowing down in 2011, following a rebound in 2010.

Although the economic slowdown will affect developed and developing countries alike, growth rates will remain much higher in the developing economies at close to 6.3% than in the developed ones at around 1.8%.

The report points out that growth in developing countries like India would remain high on the back of strong domestic demands.

While the developing economies are expected to grow at over 6%, growth in the developed world is estimated to remain in the range of 1.5 to 2%.

"The developing countries like India are in a healthier shape but shape of global economy is not good," said Jayati Ghosh, economist and professor of economics at the Jawaharlal Nehru University.

Ghosh suggested measures such as greater and tighter financial regulation and stressed the need to control exchange rates. According to her, the financial deregulation was one of the main factors leading to the global crisis.

The report proposed the adoption of rule-based managed floating to curb excessive currency speculation and presented measures such as stricter regulation of financial markets, including for commodity derivatives, for restructuring of national banking system.