World Bank pegs India’s GDP at 8.3% for 2021-22

World Bank has retained the growth forecast for FY21-22 at 8.3% same as June’s forecast as India’s recovery is yet to become broad-based. The report says growth forecast has been upgraded for 2022-23 and 2023-24 to 8.7% and 6.8%, respectively. This is due to the improvements in sectors such as farm, mining and manufacturing. The first advanced estimates of the national income released by NSO, the economy is expected to grow at 9.2% in 2021-22.

According to this, economy is surpassing pre-COVID level. “The economy should benefit from the resumption of contact-intensive services, and ongoing but narrowing monetary and fiscal policy support,” according to report. The up gradation for upcoming FY23 and 24 entails on investment outlook improvement with private investments in manufacturing. They are expected to get benefit from Production Linked Incentive (PLI) schemes. According to the report, “The growth outlook will also be supported by ongoing structural reforms, a better than-expected financial sector recovery, and measures to resolve financial sector challenges despite ongoing risks”. Inflation has been high in major South-Asian economies, In India also, core inflation is at the upper end of targeted range. The report said the economies have recovered from second wave of pandemic. It further added India’s damage by second wave has already been unwound with output effectively reaching to prior pandemic levels (2019 Q4).

As per the Global Economic Prospects report, following a strong rebound in 2021, the global economy is entering a pronounced slowdown amid fresh threats from COVID variants and a rise in inflation, debt, and income inequality that could endanger the recovery in emerging and developing economies. Global growth is expected to decelerate from 5.5% in 2021 to 4.1% in 2022 and 3.2% in 2023 as pent-up demand dissipates and Fiscal and Monetary support is unwound across the world.