UN predicts 7.5% Indian economy growth in 2021, warns situation is ‘fragile’
“Given the fluid situation, India’s growth prospects in 2021 are very fragile,” he warned.
He noted that while “India has been hit particularly hard by a brutal second wave, which is overwhelming the public health system in large parts of the country,” the country has also “expanded vaccine eligibility and increased supply. in every way possible “.
The mid-year forecast is 0.2 percent higher than January’s forecast for this year and has been revised up 4.2 percent for next year.
The report predicts that investment growth will fall 10.2% this year.
The UN projection for India is far lower than the International Monetary Fund‘s (IMF) optimistic forecast of 12.5% last month, just as the Covid-19 surge was starting. But there is also a difference in the time periods used by two organizations: the UN follows the calendar year, while the IMF uses the fiscal year in which the growth forecast would take into account the growth of the first months of the year. 2021.
The UN report said it expects the global economy to grow 5.4% in 2021, supported by the recovery in the world’s two largest economies, China and the United States. , due to “rapid vaccinations and continued budgetary and monetary support measures”.
This year, the Chinese economy is expected to grow by 8.2% and that of the United States by 6.2% – the highest level since 1984.
Introducing the report, the head of the United Nations Development Research Service, Hamid Rashid, said universal access to vaccines was a critical factor for the global economic recovery as it will create its immunity to allow the resumption of economic activities. .
The report, however, painted a grim picture of the global immunization situation.
He said: “As of April 24, 2021, 1.01 billion doses of vaccine had been administered worldwide, with the United States, United Kingdom and China collectively accounting for nearly 50% of all doses administered in the world. world. Only about 1 in 10 people worldwide have received an injection of the vaccine so far (Figure I). The vaccination rate is only 1 in 100 in Africa. “
For South Asia, the report says, economic growth will return to 6.9% in 2021 from a drop of 5.6% in 2020, but the recovery will be very uneven and the healing effects will be profound.
He added: “Indeed, South Asia’s regional economic growth in 2021 will still be insufficient to compensate for last year’s loss of 6.7% of GDP (gross domestic product) per capita. of the region who have fallen into extreme poverty will therefore remain trapped. in their precarious state. “
(Arul louis can be contacted at [email protected] and follow @arulouis)