The World Bank has kept India’s economic growth prediction for the current fiscal year at 8.3%, citing the fact that the recovery is still in its early stages.
According to the National Statistical Office’s (NSO) first advanced estimates of national income released last week, the economy is expected to grow at 9.2% in 2021-22, exceeding the pre-COVID level in actual terms, owing to improved performance, particularly in the farm, mining, and manufacturing sectors.
“India’s GDP is predicted to grow by 8.3% in fiscal year 2021/22 (ending March 2022), unchanged from June’s prediction, as the recovery has yet to gain traction.”
The revival of contact-intensive services, as well as continuous but narrower monetary and fiscal policy support, should assist the economy, according to the World Bank’s latest Global Economic Prospects report, released on Tuesday.
The report also stated that the growth forecasts for 2022-23 and 2023-24 had been improved to 8.7% and 6.8%, respectively. The upward revision reflects a brighter investment outlook, with private investment, particularly in manufacturing, benefiting from the Production-Linked Incentive (PLI) Scheme, as well as increased infrastructure spending.
“Continued structural changes, a stronger-than-expected financial sector recovery, and measures to address financial sector difficulties despite remaining uncertainties” will all help boost growth, according to the research.
Since late 2019, consumer inflation in South Asia’s major economies has been above central banks’ objectives, according to the report.
Since mid-2021, India’s inflation has been returning to the mid-point of the 2-6 percent target range, thanks to lessening supply disruptions associated to COVID and insufficient demand. Core inflation, on the other hand, is still at the high end of the target range.
Economic activity has recovered following the huge setback to health and economic activity caused by the second wave of COVID in South Asia in mid-2021, according to the study.
COVID instances decreased last year, but are already increasing in some sections of the region as the Omicron form spreads swiftly in early 2022.
The economic damage inflicted by the second wave in India has already been undone, with output basically returning to pre-pandemic levels (2019 Q4) as COVID cases and limitations faded, according to the report.
Following a strong rebound in 2021, the global economy is entering a pronounced slowdown, according to the Global Economic Prospects report, amid new threats from COVID variants and rising inflation, debt, and income inequality, which could jeopardise the recovery in emerging and developing economies.
As pent-up demand fades and fiscal and monetary assistance is removed around the world, global GDP is predicted to slow sharply from 5.5 percent in 2021 to 4.1 percent in 2022 and 3.2 percent in 2023.