India to grow by 7.2% in 2021: UN

According to the United Nation’s Trade and Development Report 2021, the Indian economy is expected to grow by 7.2% in 2021. However, the economy is expected to growth 6.7% in 2022, thus showing deceleration next year. The report states that India’s recovery is constrained by the cost fallen upon economy and human life due to ongoing COVID-19 pandemic and negative impact of rise in food prices on private consumption.

The report said, “Going forward, assuming away a resurgence of the pandemic to the degree experienced in the second wave, a revitalization of private sector activity, subject still to a slow recovery of jobs, is likely to be matched with a more adverse policy environment, especially on the fiscal front, and with continuing pressures on the trade balance. On these conditions, the economy is expected to decelerate to 6.7 per cent growth in 2022.”

The report further added that consumer inflation in India was already 6% pre-pandemic i.e., at the lower end of the inflation target band. COVID-19 pandemic somewhat dampened the inflation pressure but as the economic recovered and food prices rose, inflation again came back to its pre-pandemic level by mid 2021.