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UNCTAD expects India’s GDP to be Contracted 6.9% in 2020 and Grow 5% in 2021

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UNCTAD sees India growth at 5% in 2021On March 18, 2021, the United Nations Conference on Trade and Development(UNCTAD) released its Trade and Development Report 2020 in which it expected India’s GDP to have contracted 6.9%(-6.9%) in 2020 and grow 5% in 2021.

  • Title of the trade report 2020 – ‘Out of the frying pan… Into the fire?’
  • The report described the year 2020 as “Annus horribilis” saying although warnings about the spread of viruses have become more frequent in recent years, “nobody anticipated the arrival of COVID-19 or its dramatic global impact.”
  • Stronger recovery will still leave global economy short of $10 trillion.

Global Scenario:

  • As per the report the global GDP is contracted by 3.9%(-3.9%) in 2020 and growing at 4.7% in 2021.

Report of UNCTAD on India’s Growth Performance:

  • India’s fall in Economic activity and growth is larger in 2020 than what UNCTAD have envisaged in mid-2020.

Impact of COVID-19:

  • India failed to meet the fiscal stimulus due to large public spending for pandemic relief.
  • The relief measures adopted by India were much smaller in scale and centered on easing supply-side constraints and providing liquidity support rather than aggregate demand support.
  • The restrictions to people’s movement are unsuccessful in containing the spread of the virus in turn it affected incomes and consumption.

Report for 2021:

  • Stronger recovery is anticipated for 2021as India’s FY22 budget is pointed towards public investment especially in transport and infrastructure.
  • It expected growth in the export sector in 2021 as there will be a recovery in global demand.

Recent Related News:

On 8th December 2020, “Invest India” won the 2020 UNCTAD Investment Promotion Award by the United Nations Conference on Trade and Development (UNCTAD). The award was presented at the award ceremony organized at the headquarters of UNCTAD, Geneva, Switzerland.

About United Nations Conference on Trade and Development (UNCTAD):

Establishment –  1964, by the United Nations General Assembly
Part of – UN Secretariat and the United Nations Development Group.
Headquarters -Geneva, Switzerland,
Member countries – 195
Acting Secretary-General – Isabelle Durant of Belgium (from 16 February 2021)