The United Nations Department of Economic and Social Affairs (UN-DESA) in its ‘World Economic Situation and Prospects (WESP) Mid-year Update 2022’ has declined India’s GDP (Gross Domestic Product) growth projections from 6.7% to 6.4% for 2022-23.
- For 2023-24, 6% GDP growth forecasted for India as against 6.1%. In 2021, India economy grew at 8.8%.
- The growth outlook for South Asia is also downgraded by 0.4 percentage points to 5.5% in 2022.
- The reasons for this decline are Ukraine-Russia Conflict, higher commodity prices and potential negative spillover effects from monetary tightening in the United States (US).
Global Scenario:
i.The world economy is projected to grow by 3.1% in 2022, down from the 4% growth forecast released in January 2022.
ii.Global inflation is projected to increase to 6.7 per cent in 2022, twice the average of 2.9 per cent during 2010-2020.
Key Points:
i.Higher prices and shortages of farming inputs including fertilizers will negatively impact the agricultural sector in India, Bangladesh, Pakistan, and Sri Lanka.
ii.South Asia’s Consumer Price Inflation (CPI) is expected to accelerate to 9.5% in 2022, from 8.9% in 2021.
iii.South Asia’s economic output is projected to expand by 5.5% in 2022.
iv.The developing countries, as a group, are projected to grow by 4.1% in 2022, down from 6.7% in 2021.
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S&P cuts FY23 India growth forecast to 7.3% on rising inflation
S&P Global Ratings in its Global Macro Update to Growth Forecasts also slashed India’s growth forecast to 7.3% from 7.8% for FY23 amid rising inflationary pressure and Russia-Ukraine war.
- For FY24, the growth is projected at 6.5%.
Key Points:
i.Indian economy’s GDP estimated a growth of 8.9% in FY22.
ii.CPI or retail inflation in the current fiscal at 6.9%
iii.The World Bank in April 2022 slashed India’s GDP forecast for fiscal 2022-23 to 8% from 8.7% predicted earlier, while IMF has cut the projections to 8.2% from 9%.
iv.Asian Development Bank (ADB) has projected India’s growth at 7.5 per cent
v.RBI, last month, cut its forecast to 7.2%from 7.8%.
Recent Related News:
i.As per the latest Periodic Labour Force Survey (PLFS) released by the National Statistical Office (NSO), India’s urban unemployment rate (persons of age 15 years and above) has jumped to 12.6% in April-June quarter of 2021, when compared to 9.3% in the January-March 2021.
ii.The United Nations Conference on Trade and Development (UNCTAD) in an update to its Trade and Development report published March 24, 2022 titled ‘Tapering in a time of conflict’ has downgraded India’s Gross Domestic Product (GDP) growth for 2022 by -2.1% to 4.6% from 6.7% amid ongoing Ukraine-Russia War.
About United Nations Department of Economic and Social Affairs (UN-DESA):
Under-Secretary-General– Liu Zhenmin
Headquarters– New York, United States (US)
