In its June 2021 Global Economic Prospects, World Bank revised India’s GDP growth forecast for FY22 to 8.3 percent from its earlier estimate of 10.1 percent, (the forecast has been revised up by 2.9 percentage points). It has also projected India’s growth in FY23 at 7.5 percent due to the impact of COVID-19.
- WB estimated India’s economy to have contracted by 7.3 (-7.3) percent in 2020. It also estimated India to grow at 7.5 percent and 6.5 percent in calendar years 2023 and 2024.
Global and South Asia growth:
i.Global Growth: WB increased its global growth forecast in 2021 from 4.1 percent (January 2021, forecast) to 5.6 percent, the fastest post-recession pace in 80 years.
ii.Growth in South Asia: It was expected to rebound to 6.8 percent in 2021, 3.6 percentage points higher than the previous projection.
Key points over WB’s projection:
i.The growth of 8.3 percent in FY22 is projected along with benefits from policy support, including higher spending on infrastructure, rural development, and health, and a stronger-than-expected recovery in services and manufacturing.
ii.The recovery in most of the Emerging Market and Developing Economies (EMDEs) regions are expected to be insufficient to reverse the damage from the COVID-19.
iii.WB mentioned – India’s fiscal policy shifts in the FY22 budget toward higher expenditure, which is targeted at health care and infrastructure to boost the post-pandemic recovery.
-Crisil cut India’s GDP growth estimate for FY22 to 9.5 percent
Crisil cut its FY22 growth estimate for India to 9.5 percent from the earlier 11 percent, with a contraction of 7.3(-7.3) percent in FY21 due to the hit to private consumption and investments following the second wave of COVID-19.
- It stated a decline in Gross fixed capital formation (GFCF) in FY21 by 10.8 percent to Rs 42.2 lakh crore, a level similar to fiscal 2018’s Rs 40.8 lakh crore.
Recent Related News:
On March 31, 2021, The World Bank reported its South Asia Economic Focus report for the year 2021, titled “Sour Asia Economic Focus Spring 2021: South Asia Vaccinates” and it has estimated India’s GDP (Gross Domestic Product) growth to be in the range of 7.5% to 12.5% for the Financial year 2021-22 (FY22) and contraction of 8.5% (-8.5%) for FY21.
About World Bank:
The World Bank Group consists of 5 organizations:
- The International Bank for Reconstruction and Development (IBRD)
- The International Development Association (IDA) (Together, IBRD and IDA make up the World Bank)
- The International Finance Corporation (IFC)
- The Multilateral Investment Guarantee Agency (MIGA)
- The International Centre for Settlement of Investment Disputes (ICSID)
Headquarters – Washington DC, USA
Member countries – 189
President – David R. Malpass (13th President)