As the Ukraine conflict impacts the global GDP, India is projected to grow by 6.4 per cent in 2022, slower than the last year’s 8.8 per cent but still the fastest-growing major economy, with higher inflationary pressures and uneven recovery of the labour market curbing private consumption and investment, according to a UN Report.
The UN Department of Economic and Social Affairs said in its World Economic Situation and Prospects (WESP) report said that the war in Ukraine has upended the fragile economic recovery from the pandemic, triggering a devastating humanitarian crisis in Europe, increasing food and commodity prices and globally exacerbating inflationary pressures.
Chief of the UN’s Global Economic Monitoring Branch Hamid Rashid said that he expects Indian recovery will be strong in the short term which is the next 1-2 years.
When asked about India’s stronger economic performance and prospects in comparison to the other major nations he attributed it to lower inflation, which does not necessitate as much monetary tightening as many of the other countries, he added.
Last fiscal year, India’s economy grew by 8.8% the report said. The IMF predicted an 8.2% growth rate in 2021-22, whereas the World Bank predicted 8%.
The global economy is now projected to grow by only 3.1 per cent in 2022, down from the 4.0 per cent growth forecast released in January 2022. Global inflation is projected to increase to 6.7 per cent in 2022, twice the average of 2.9 per cent during 20102020, with sharp rises in food and energy prices, it said.
The report said that the outlook in South Asia has deteriorated in recent months, against the backdrop of the ongoing conflict in Ukraine, and higher commodity prices and potential negative spillover effects from monetary tightening in the United States.
The regional economic output is projected to expand by 5.5 per cent in 2022, which is 0.4 percentage points lower than the forecast released in January.
India, the largest economy in the region, is expected to grow by 6.4 per cent in 2022, well below the 8.8 per cent growth in 2021, as higher inflationary pressures and uneven recovery of the labour market will curb private consumption and investment, it said. For the fiscal year 2023, India’s growth is forecast to be 6 per cent.
