India’s economy to grow at 8.3 per cent in FY2021-22: World Bank

The World Bank report kept the growth projection of India unchanged at 8.3 per cent from its June forecast. Know why? Also, read key findings of the report and risks to the Indian economy.

World Bank, Source: Reuters
World Bank, Source: Reuters

India’s GDP growth rate is expected to grow at 8.3 per cent in FY2021-22, stated the World Bank in its latest South Asia Economic Focus report titled ‘Shifting Gears: Digitization and Services-Led Development’ on October 7, 2021. The World Bank kept the growth projection of India unchanged at 8.3 per cent from its June forecast. The Gross Domestic Product (GDP) of India registered a growth of 20.1 per cent in first quarter (April-June quarter) of FY2021-22 owing to ‘a significant base effect, strong export growth and limited damage to domestic demand’, the report stated.

Also read: Indian economy expected to grow 10 per cent during FY2021-22: NCAER

India’s economy to grow at 8.3 per cent in FY2021-22 – World Bank: Key findings

India’s economy is expected to grow at 8.3 per cent in FY2021-22 with the help of increased public investment and incentives to boost manufacturing. Successful implementation of agriculture and labour reforms would boost medium-term growth.

The increasing pace of vaccinations will determine India’s economic prospects in 2021. The growth is projected to stabilize at around 7 per cent from the financial year 2023 onwards owing to the recent structural reforms to ease supply-side constraints and increased infrastructure investment, stated the report.

World Bank report: What are the risks to Indian economy?

Higher than expected inflation and slow recovery of the informal sector as the main risks to consumer spending, stated the report. It warned that the persistently high inflation could also put pressure on the RBI’s accommodative monetary policy stance.

Why is current GDP growth projection same as June forecast?

World Bank’s chief economist for South Asia Hans Timmer said that India’s current GDP growth projection at 8.3 per cent is in line with World Bank’s June 2021 global report titled Global Economic Prospects. “Recent economic data are still consistent with that number, in our view,” said Timmer.

Throughout the COVID pandemic, the World Bank has incorporated a range for India’s growth in 2021 from 7.5 per cent to 12.5 per cent owing to uncertainties. As per the latest numbers, the growth of India’s economy is towards the lower end of that range.

Also read: India's GDP estimated to grow at 8.3 percent in FY 2021-22: World Bank

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