Saturday, 28 January 2023

IMF set the Indian economy to grow at 9.5 percent this year and 8.5 in 2022

IMF set the Indian economy to grow at 9.5 percent this year and 8.5 in 2022

India’s economy, which contracted by 7.3 percent due to the Covid-19 pandemic, is expected to increase by 9.5 percent in 2021 and 8.5 percent in 2022, On Tuesday As per the latest projections released by International Monetary Fund (IMF).

India’s growth estimate released by the latest World Economic Outlook (WEO) remains unchanged from its previous WEO update of July these summers. Still, it is a three percentage point in 2021 and a 1.6 percentage point drop from its April projections.

As per the latest WEO update, it was released ahead of the annual meeting of the IMF.

And World Bank, the world is expecting to grow at 5.9 percent in 2021 and 4.9 percent in 2022.

The United States is projecting to grow at six percent this year and 5.2 percent the following year.

On the other hand, the IMF said, China is projecting to grow at 8 percent in 2021 and 5.6 percent in 2022.

Gita Gopinath, Chief Economist of IMF, said that compared to their July forecast, the global growth estimate for 2021 has been revised down marginally to 5.9 percent and is unchanged for 2022 at 4.9 percent. However, this modest headline revision masks a significantly lower down for some nations.

IMF set the Indian economy to grow at 9 5 percent this year and 8 5 in 2022 1unsplash image

Read More : Retail inflation of India drops to 4.35% in September

She said.

“The outlook for low-income developing country group has darkened considerably due to weaken pandemic dynamics. The downgrade also reflects more difficult near-term hope for the advanced economy group, in part due to supply disruptions,”

The Indian-American economist added.

“Partially balance these changes, projections for some commodity exporters have been upgraded on a back of rising commodity prices. Pandemic-related distrubance to contact-intensive sectors have caused the labour market recovery to significantly lag the output recovery in most countries,”

She is observing that the dangerous divergence in economic prospects across countries remains a significant concern. She said aggregate output for the advanced economy group is expected to regain its pre-pandemic trend path in 2022 and exceed by 0.9 percent in 2024.

She added.

“By contrast, mass output for the developing emerging market and developing economy group (excluding China) is expected to remain 5.5 per cent below the pre-pandemic predict in 2024, resulting in a larger upset to improvements in their living standards,”

A leading common factor behind these complex challenges is the continued grip of the pandemic on global society.

Gopinath said that the foremost policy priority is to vaccinate at least 40 percent of people in every country by the end-2021 and 70 percent by the 2nd quarter of 2022.

She said.

“This will require high-income countries to fulfil existing vaccine dose donation pledges, coordinate with manufacturers to prioritise deliveries to COVAX in the near-term and remove trade restrictions on the flow of vaccines and their inputs,”

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