The projection is lower than the forecast by the Reserve Bank of India, which had in December said that the GDP growth rate is likely to be 9.5 percent for the current fiscal, reports Asian Lite News
India’s economic growth is expected to be 8.3 per cent in the current financial year and 8.7 per cent in 2022-23, according to the World Bank’s “Global Economic Prospects” report, released on Tuesday.
The World Bank has maintained its forecast for India’s growth rate at the same level as it had projected in October 2021 even as it expects the global economic growth to slow down sharply.
The World Bank report said global economic growth will “decelerate markedly” this year as coronavirus outbreaks and supply chain snarls persist. At the same time, the support programmes unveiled by several governments are about to end.
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The report said that global growth will slow down to 4.1 percent this year from an estimated 5.5 percent in 2021, but warned “Omicron-related economic disruptions could substantially reduce growth” to as low as 3.4 percent.
The report also said that the Indian economy’s growth rate in the current, as well as the next fiscal, will be stronger compared to its immediate geographic neighbours.
Bangladesh is expected to grow at 6.4 and 6.9 percent in 2021-22 and 2022-23, respectively, while Nepal’s growth is expected to be at 3.9 percent this fiscal and at 4.7 percent in the next financial year. Pakistan’s economy will grow by 3.4 percent in the current fiscal and at 4 per cent in 2022-23, the report said.
Incidentally, as per the first advance estimate released by the ministry of statistics and programme implementation on January 8, India’s GDP growth is likely to be 9.2 per cent in the current fiscal.
The projection is lower than the forecast by the Reserve Bank of India (RBI), which had in December said that the GDP growth rate is likely to be 9.5 percent for the current fiscal.
Global growth forecast downgraded to 4.1%
The global economy is on track to grow by 4.1 per cent in 2022, down 0.2 percentage point from a previous projection, the World Bank Group said in its latest Global Economic Prospects release.
“The global recovery is set to decelerate markedly amid continued Covid-19 flare-ups, diminished policy support, and lingering supply bottlenecks,” the semiannual report added on Tuesday.
The global outlook is “clouded by various downside risks,” including renewed Covid-19 outbreaks due to new virus variants, the possibility of unanchored inflation expectations, and financial stress in a context of record-high debt levels, according to the report.
After rebounding to an estimated 5.5 per cent in 2021, global growth is expected to decelerate markedly to 4.1 per cent in 2022, the report noted. The latest projection for 2021 and 2022 is 0.2 percentage point lower than the June forecast, respectively.
The report also noted that the Covid-19 pandemic has raised global income inequality, partly reversing the decline that was achieved over the previous two decades, Xinhua news agency reported.
By 2023, annual output is expected to remain below the pre-pandemic trend in all emerging market and developing economy (EMDE) regions, in contrast to advanced economies, where the gap is projected to close.
Preliminary evidence suggests that the pandemic has also caused within-country income inequality to rise somewhat in EMDEs because of particularly severe job and income losses among lower-income population groups, according to the report.
“The world economy is simultaneously facing Covid-19, inflation, and policy uncertainty, with government spending and monetary policies in uncharted territory,” said World Bank Group President David Malpass.
Noting that rising inequality and security challenges are “particularly harmful” for developing countries, Malpass added that putting more countries on a favourable growth path requires concerted international action and a comprehensive set of national policy responses.
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