The UN has marginally raised their forecast for India’s growth to 7.5pc and 10pc growth rate for 2022 which puts India in the position of the fastest-growing major economy ahead of China.
The UN report said that the outlook for India in 2021 is, however, highly fragile with the second wave that has struck the country hard with public healthcare systems overwhelmed in major parts of India. The report continued to highlight that despite India’s efforts on ramping up vaccine production, it will still be unequal and insufficient to meet the vast demand. This is the reason why the 2021 outlook for India looks “bleak” according to the UN.
The global economy is forecast to expand by 5.4pc in 2021 according to the World Economic Situation and Prospects mid-2021 report. The report stated that the global economy in 2020 de-grew 3.6pc.
China and the US are already on a path to recovery with rapid vaccinations and sustained monetary measures. On the other hand, several other economies including India are enduring troubled times with the inadequacies of the vaccines. This will offset the global growth in 2021 which is being led by the two largest economies—China and the US.
Moodys’s Investors Services has pegged India’s growth for FY2022 at 9.3pc slashing it from the previously estimated 13.7pc growth. The negative impact of the second wave will put the economy in deep financial stress, the rating agency believes. The lockdown has brought economic activities to a threshold that is hurting consumer sentiments. Moody’s expects the negative impact to be limited from April to June which is set to be followed by a strong recovery in the second half of FY2022.