India's economy is projected to grow 7.6 per cent in fiscal year 2018-19, remaining the fastest growing economy in the world, as robust private consumption and benefits from past reforms help the country's GDP gain momentum but sustained recovery in private investment remains a crucial challenge, according to a UN report.

The UN World Economic Situation and Prospects (WESP) as of mid-2018, launched today, said GDP growth in India is expected to climb to 7.5 and 7.6 per cent in fiscal years 2017-18 and 2018-19 respectively.

This is a substantial recovery from the 6.7 per cent growth India registered in fiscal year 2017.

"Among the major economies, growth in India is gaining momentum, underpinned by robust private consumption, a slightly more supportive fiscal stance and benefits from past reforms," the report said.

It added that although capital spending has shown signs of revival, a more widespread and sustained recovery in private investment remains a crucial challenge in India.

In China, growth is expected to remain solid, supported by robust consumer spending and supportive fiscal policies.

Amid ongoing structural reforms, growth in the Chinese economy is projected to gradually moderate from 6.9 per cent in 2017 to 6.5 per cent in 2018 and 6.3 per cent in 2019.

While ongoing efforts to address financial vulnerabilities will contribute to more sustainable medium-term growth, the authorities face the policy challenge of ensuring that associated deleveraging does not derail growth in the short term.

The report added that growth in the world economy is surpassing expectations and global GDP is now expected to expand by more than three per cent this year and in 2019, reflecting strong growth in developed countries and broadly favourable investment conditions.

However rising trade tensions, heightened uncertainty over monetary policy, increasing debt levels and greater geopolitical tensions can potentially thwart progress, according to the report.

World economic growth is now forecast to reach 3.2 per cent both in 2018 and 2019, an upward revision by 0.2 and 0.1 percentage points, respectively.

This revised outlook reflects further improvement in the growth forecast for developed economies due to accelerating wage growth, broadly favourable investment conditions, and the short-term impact of a fiscal stimulus package in the US.  -- PTI