“India’s recovery is on track,” the United Nations stated on Thursday, noting that the nation had the highest anticipated growth rate among major economies last year and is expected to continue on that road this year and next.
India’s gross domestic product (GDP) grew at 9% last year, according to the UN’s annual World Economic Situation and Prospects (WESP) report, and is expected to rise at 6.7 percent this year and 6.1 percent next year, maintaining its position as the largest economy in the world.
According to the paper, India’s GDP shrank by 7.1 percent in 2020, the year the Covid-19 epidemic hit the planet, indicating a negative growth rate.
China, which ranked second among the global economies, grew by 7.8% last year and is expected to rise by 5.2 percent this year and 5.5 percent next year.
Overall, the global economy grew at a rate of 5.5 percent last year, rebounding from a 3.4 percent contraction in 2020.
Growth is expected to be 4% this year and 3.5 percent in 2023.
“India’s economic recovery is on a firm footing,” according to the study, “amid fast immunization progress, less social constraints, and still supportive fiscal and monetary postures.”
From its study a year ago, the WESP increased India’s growth forecast for last year by 1.7 percent and its growth outlook for this year by 0.8 percent.
It blamed declining base effects for the deceleration of growth from 9% last year to 6.7 percent this year.
While “strong export growth and public investments sustain economic activity,” the WESP cautioned that “high oil prices and coal shortages might stifle economic activity in the near term.”
“Encouraging private investment to ensure inclusive growth beyond the recovery will be critical,” it suggested.
“Inflation is expected to decelerate throughout 2022, continuing a trend seen since the second half of 2021, when relatively restrained food prices compensated for higher oil prices,” the report said, cautioning that “a sudden and renewed rise in food inflation, however, due to unpredictable weather, broader supply disruptions, and higher agricultural prices, could undermine food security, reduce real incomes, and increase hunger across South Asia”) reg.
According to the research, consumer price inflation in India was 5.9% last year and is expected to drop to 5.6 percent this year and 5.3 percent next year.
The Reserve Bank is projected to boost interest rates this year, according to the WESP.
“The global economic recovery is experiencing substantial headwinds with new waves of Covid-19 infections, continuing labour market issues, lingering supply-chain challenges, and growing inflationary pressures,” the study stated in its assessment of the world economy.
“Growth momentum slowed dramatically by the end of 2021, notably in China, the United States, and the European Union, as the benefits of monetary and fiscal stimulants began to fade and severe supply-chain disruptions arose,” according to the research.
“In this fragile and unequal time of global recovery,” said Secretary-General Antonio Guterres, “the World Economic Situation and Prospects 2022 calls for more targeted and coordinated policy and budgetary measures at the national and international levels.”
According to the WESP, the 46 nations designated as least developed are expected to increase by only 1.4 percent this year.
“The moment has come to address the disparities in inequality within and between countries. We can make 2022 a genuine year of recovery for people and economies alike if we work together as one human family “According to Guterres.
For South Asia, the WESP painted a mixed picture.
“Amid good macroeconomic policies, Bangladesh has handled the Covid-19 epidemic pretty effectively,” said the research, adding that Bangladesh’s “GDP is predicted to increase by 6% in 2022.”
Its “economic activity is based on export growth and expanding clothing demand, strong remittance inflows, and flexible fiscal and monetary policies,” according to the report.
According to the research, Pakistan’s economy is expected to grow by 3.9 percent in 2022, following a 4.5 percent rise in 2021, “fueled by private spending, record-high remittances, and fiscal assistance.”
However, the WESP forecasted a 2.6 percent GDP growth for Sri Lanka this year, citing “food shortages, declining foreign reserves, and sovereign debt problems” as main challenges.
After a 6.2 percent anticipated rise last year, the UK was forecast to be the best performer among industrialized countries this year, with a 4.5 percent GDP growth.
Last year, the European Union’s growth was anticipated to be 4.7 percent, and this year’s growth is expected to be 3.9 percent.
According to the research, growth in the United States was 5.5 percent last year and is expected to be 3.5 percent this year.
While the WESP utilized calendar year calculations for the study to allow for country comparisons, it also included this fiscal year growth forecast for India – 2020-2021: -(minus)10.6% in 2021-22, 8.4% in 2022-23, 6.5 percent in 2023-24, and 5.9% in 2023-24.