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UN-ESCAP Forecasted India’s GDP growth to 7% in FY22 and Contraction of 7.7% in FY21

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2021 economic output likely to remain below 2019 levelOn March 30, 2021, The United Nations Economic and Social Commission for Asia and the Pacific (UN-ESCAP) reported the survey on economic growth over Asia and the pacific region the report titled “Economic and Social Survey of Asia and the Pacific 2021:Towards post-COVID-19 resilient economies”

Key points about the report by ESCAP:

  • The report has forecasted the Indian economy to grow at 7% in FY22 against a contraction of 7.7%(-7.7%) in FY21.
  • It reported a “K-shaped recovery” in the economics of the Asia Pacific region, including India.
  • On average, the Asia-Pacific region’s developing economies are expected to grow 5.9% in 2021 and 5% in 2022, with a contraction of 1%(-1%) in 2020.
  • China became the only major economy (worldwide) to achieve a positive annual economic growth rate in 2020.

ESCAP’s Report on Indian Economy:

  • Despite a strong reduction in COVID-19 cases and vaccine rollout, ESCAP forecasted India’s 2021 economic output to remain below the 2019 level.
  • It estimated a zero year-on-year growth with a moderate recovery in the fourth quarter of FY21.
  • It mentioned the challenge that India could face i.e. The difficulty in maintaining low borrowing costs meanwhile keeping the non-performing loans under check.
  • In its second advance estimates of national accounts, the National Statistical Office (NSO) has projected an 8 per cent contraction in 2020-21.

Economic report for Asia-Pacific regions:

  • China: The report mentioned China to be the only major economy worldwide to achieve a positive annual economic growth rate in 2020 with a 6.5% year-on-year growth rate.
  • ESCAP estimated that additional 89 million people in the Asia-pacific region could have been pushed back into extreme poverty at the $1.90 per day threshold.

Note – The international poverty line is $1.90 per day; it is the threshold that determines whether someone is living in poverty.

About the K-shaped recovery:

  • ESCAP reported that the Asia Pacific region, including India, is observing a “K-shaped recovery” of their economies due to COVID-19.

“K-shaped recovery”-  It is one of the types of recovery after a recession in which different sectors and economic groups of an economy recover at different speeds, with the most vulnerable sections severely impacted, taking longer to come out from the jolt of the pandemic-induced recession.

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About The United Nations Economic and Social Commission for Asia and the Pacific (UN-ESCAP)

Establishment – 1947 as the Economic Commission for Asia and the Far East (ECAFE)
Executive Secretary – Armida Salsiah Alisjahbana
Headquarters – Bangkok, Thailand