World Bank Forecasts India To Grow At 8.3 Per Cent In 2021; Adds That It Would Be Second-Fastest Growing Major Economy

Even as India’s recovery is being hampered by the second wave of coronavirus pandemic, the World Bank on Tuesday (8 June) projected the country’s economy to grow at 8.3 per cent in 2021 and 7.5 per cent in 2022, reports Economic Times.

The data shows an increase of nearly 3 per cent from its January projection, but lower than the April estimate by almost 2 per cent. In January, the Bank had forecast a growth of India's gross domestic product GDP) by 5.4 per cent which is 2.9 per cent less than the latest expectation, and in April by 10.1 per cent, which was higher by 1.8 per cent.

In its latest issue of Global Economic Prospects, the Washington-based entity has stated that the unprecedented scale of the Covid-19 second wave in India has hampered the sharper-than-expected rebound in activity seen during the second half of Fiscal Year 2020/21, especially in services.

"India's recovery is being hampered by the largest outbreak of any country since the beginning of the pandemic," the World Bank said.

It added that India would be the second-fastest-growing major economy, behind only China which is forecast to grow by 8.5 per cent.

The report said that India's growth forecast is "supported by plans for higher spending on infrastructure, rural development, and health, and a stronger-than-expected recovery in services."

But it added, "Better growth prospects since January, however, masks significant damage to economic activity from COVID19."

The report said that reflecting the "rebounds in some major economies," the global growth in 2021 at 5.6 per cent "is expected to reach its strongest post-recession pace in 80 years."

The Bank projected the global growth to slowdown to 4.3 next year and to 3.1in 2023 as the effect of the rebound from the shrinkage of 3.5 per cent in 2020 wears off.

Overall for South Asia, the Bank said, "Growth is projected to rebound to a stronger-than-expected 6.8 per cent in 2021, partly reflecting momentum from the end of last year."

India accounts for most of the upgrade for the region "as strong services sector activity more than offsets the economic effects of the worsening pandemic," it said, adding, "The outlook is underpinned by a rebound in private consumption."

Pakistan's economy is expected to grow by only 2 per cent this fiscal year, Bangladesh's by 5.1 per cent Bhutan by 5 per cent and Nepal by 3.9 per cent, according to the Bank.

With IANS Inputs