The United Nations informed on May 11, 2021, that India has been projected to grow at 10.1% in the year 2022. The country will be the fastest-growing major economy in the world. However, the global agency has cautioned that the growth outlook of the country in 2021 was highly fragile as it was the new hotbed of the pandemic.
The UN, in its mid-year update of the World Economic Situation and Prospects- WESP which was first released in January 2021, has projected that the Indian economy will grow at 10.1% in 2022, nearly doubling the 5.9% growth forecast for India in the January report.
With a 10.1% growth rate, India will be the fastest-growing economy, even ahead of China which is projected to grow at 5.8%, it is a major slowdown from 8.2% in 2021.
Mid-year update on India’s economic growth:
According to the mid-year update, India will be registering a 7.5% growth in 2021, after an estimated contraction of 6.8% in the year 2020. The update has provided an upward revision for growth projection for India from the UN forecasts that were released in January 2021.
The World Economic Situation and Prospects report of January had estimated that the Indian economy will contract by 9.6% in the year 2020. It had projected a 7.3% growth rate in 2021 and a 5.9% GDP growth in the year 2022.
India’s growth in 2021 to be highly fragile:The report while projecting positive economic growth for the country in 2022 has also warned that given the fluid situation, the growth outlook of the country in 2021 will be highly fragile. It further explains that India has been particularly affected by a brutal COVID-19 second wave, which has severely impacted the public health system in large parts of India. The report adds that the country has been expanding the vaccine eligibility and is also ramping up the supply in every possible manner, but the access to vaccines in the country is highly unequal and insufficient to meet the massive demand. In an overview of the global progress on vaccination, the number of doses administered in India is low at a ratio of 10 per 100 people, in comparison with the 68.2 per 100 people in the US, 13.6 in the Caribbean and Latin America, and 12.4 in Russia. |
Growth outlook bleak for large number of countries: Report
The mid-year report has noted that the growth outlook is bleak for a large number of countries in South Asia, Africa as well as the Caribbean, and Latin America, where the COVID-19 pandemic is still raging.
The report states that India, with daily fresh infections averaging over 3,00,000 during the third week of April 2021, is not the new hotbed of the ongoing pandemic.
However, it added that the worst is far from over for Argentina, Brazil, Colombia, and Peru and that for a vast majority of developing nations, economic output will remain below 2019 levels for most of 2021.
Amid the insufficient fiscal space for stimulating demand, many of these nations around the world will be facing low and stagnant growth and the prospect of a lost decade.
Mid-year update identifies South Asia as one of the hardest-hit regions:
The mid-year update has noted that South Asia which is already one of the hardest-hit regions in the world will be experiencing the Coronavirus crisis well into 2021.
It added that while the smaller nations in the region have managed to roll out the vaccination successfully, the larger economies still continue to struggle to manage the increasing waves of Covid infections.
The report has projected that the economic growth in the South Asia region will return in 2021 at 6.9% against a 5.6% drop in 2020, however, the recovery will be extremely uneven and the effects will run deep.
The economic growth of South Asia in 2021 will still be insufficient to undo 2020’s 6.7% loss in GDP per capita. The report cautions that the risks in the region are exceptionally high. South Asia was already behind in the economic performance before the pandemic, with a regional economic growth as low as 3.1% in 2019.
The global economy is projected to expand by 5.4% this year, but growth remains fragile in many countries.
— United Nations (@UN) May 11, 2021
Equitable access to #COVID19 vaccines around the world is key for a broad-based recovery.
More in @UNDESA's latest #WorldEconomyReport: https://t.co/PHLOxSfEME pic.twitter.com/RA07A4F5Il
Global economy projected to expand in 2021:The World Economic Situation and Prospects mid-2021 report has claimed that after following a sharp contraction of 3.6% in 2020, the global economy is projected to expand by 5.4% in the year 2021. The projection reflects an upward revision from the UN forecasts that were released in January 2021. The report stated that amid the rapid vaccination and the continued monetary and fiscal support measures, the US and China- the two largest economies- are well on the path to recovery. |
Vaccine inequity poses risk to fragile global recovery:
Even though the global outlook improves because of the robust rebound in China and the US, the vaccine inequity between the nations and the regions still poses a significant risk to an uneven and fragile global recovery.
Timely and universal access to vaccination will mean ending the pandemic promptly as well as placing the world economy on the path of resilient recovery.
According to the Chief of Global Economic Monitoring Branch at the UN Department of Economic and Social Affairs, Hamid Rashid, who is also the lead author of the report, the covid pandemic has pushed some 58 million girls and women into extreme poverty which is huge to poverty reduction efforts worldwide.
It has further led to the gender gaps in income, impending progress on gender inequality, and wealth and education.
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