Washington: The World Bank on Tuesday slashed India’s GDP (Gross Domestic Product) growth forecast for the fiscal year 2021-22 to 8.3 per cent from the earlier estimated 10.1 per cent. It has said that the most dangerous second wave of the Covid-19 epidemic has hurt economic revival.
The lending multilateral institution has projected the economic growth rate to be 7.5 percent in 2022-23. The World Bank, in a new edition of the report titled Global Economic Prospects, has said that India was witnessing a rapid revival in the second half of 2020-21, especially in the services sector, but the second wave of the Kovid-19 pandemic affected it. have been adversely affected.
According to the institute, “India experienced the worst wave since the onset of the pandemic and adversely affected the economic revival.”
It is noteworthy that in the financial year ended March 31, 2021, the economy declined by 7.3 percent, while it grew by 4 percent in 2019-20.
In April this year, the World Bank had projected a 10.1 percent growth in GDP in 2021-22. This was higher than the 5.4% increase reported in January. But now the estimate has been lowered.
The multilateral institution has projected the economic growth rate to be 6.5 percent in 2023-24. The World Bank report states that the global economy is expected to grow by 5.6 percent in 2021. If that happens, it will be the strongest growth since the recession in 80 years.
It said, “India’s GDP is expected to grow by 8.3 percent in 2021-22 (April-March).” According to the report, policy support, including higher expenditure on infrastructure, rural development and health, and services and manufacturing. More than expected revival will accelerate activities.
In the estimates for the financial year 2021-22, the damage to the economy due to the second wave of Kovid-19 and the restrictions imposed from March 2021 for its prevention has been taken into account.
“Consumption and investment will be adversely affected by the pandemic as confidence is already weak and books have been adversely affected,” the report said. The growth rate is expected to slow down to 7.5 per cent in the financial year 2022-23. This reflects the cascading impact of COVID-19 on households, companies and banks’ books, weakening customer confidence and uncertainty in employment and income.
Regarding the global economy, it has been said in the report that in 2021 it will grow by 5.6 percent. If that happens, it will be the strongest growth in 80 years after the recession. This is mainly because of the strong revival in some of the major economies.
However, despite the revival, global production will be 2 per cent lower this year than pre-pandemic estimates. Among the major economies, the US is projected to grow 6.8 percent this year. The reason for this is large-scale fiscal support and easing of restrictions related to the epidemic.
Growth will be strong in other developed countries but its pace will be slow. According to the report, China’s growth rate in emerging and developing countries is likely to be 8.5 percent in 2021. The reason for this is the acceleration in suppressed demand.
World Bank Group President David Malpass said, “There are signs of revival globally, but the pandemic has increased poverty and inequality in developing countries.”
“Coordinated efforts are necessary to accelerate vaccine distribution and debt relief globally, especially for low-income countries,” he said. As the health crisis subsides, policymakers will need to take steps to address the lasting effects of the pandemic and promote green, robust and inclusive growth while ensuring broader economic stability.”