New Delhi: The Indian economy is expected to grow at 8.3 percent in the current fiscal and at 8.7 percent in financial year 2022-23, the World Bank said in its ‘Global Economic Prospects’ report released on January 11.
The 8.3 percent GDP growth prediction for FY22 is the same as what was stated by the World Bank in its last projection released in October 2021.
According to the Global Economic Prospects report, the growth rate of the Indian economy in the current and next fiscal will be stronger as compared to its immediate neighbours.
Bangladesh is expected to grow at 6.4 and 6.9 percent in FY22 and FY23, respectively; Nepal at 3.9 percent this fiscal and at 4.7 percent in the next financial year; and Pakistan’s economy is predicted to accelerate by 3.4 percent in FY22 and 4 percent in FY23, as per the report.
The global economic growth, according to the World Bank report, will “decelerate markedly” this year as COVID-19 outbreaks and supply chain snarls persist. At the same time, the support programmes unveiled by several governments are about to end, it added.
The Washington-based development lender forecast global growth to slow down to 4.1 percent this year from an estimated 5.5 percent in 2021, but warned “Omicron-related economic disruptions could substantially reduce growth” to as low as 3.4 percent.
For India, however, the successive World Bank projections have signalled a post-pandemic recovery. On March 31, the bank said India’s real GDP growth for fiscal year 21-22 could range from 7.5 to 12.5 per cent.
In April-May, India struggled with the second wave of the deadly coronavirus pandemic with more than 3,00,000 daily new cases, throwing hospitals and health system out of gear due to a shortage of medical oxygen and beds. An array of economic activities were severely hit in this period.
After considering the second COVID-19 jolt, the World Bank, in South Asia Economic Focus report released in early October, said the Indian economy is poised to grow by 8.3 percent. The economy of South Asia region was projected to grow by 7.1 percent.
According to the first advance estimate released by the Ministry of Statistics and Programme Implementation on January 8, India’s GDP will likely grow by 9.2 percent in FY22.
The projection is lower than the forecast by the Reserve Bank of India (RBI), which had in December said that the GDP growth rate is likely to be 9.5 percent for the current fiscal.
While the estimated GDP growth rate of 9.2 percent for FY22 is the highest in at least 17 years, it has been aided by an extremely favourable base effect, with the GDP having contracted by a record 7.3 percent in FY21 on account of the COVID-19 pandemic.