India’s economy is expected to grow by 9.5% in 2021 and 8.5% in 2022, as per the latest International Monetary Fund (IMF) projections released on Tuesday. The economy contracted by 7.3% due to the coronavirus pandemic. The latest World Economic Outlook (WEO) vis-à-vis India remains unchanged from its previous update of July 2021 but is a 1.6% point drop from its April projections.
IMF chief economist Gita Gopinath said that compared to the July projections, the global growth projection for 2021 has been downgraded to 5.9 % and remains unchanged for 2022 at 4.9%. The global economic watchdog further said that while the US is projected to grow at 6 % rate this year and 5.2% the next year, China is projected to grow at 8% in 2021 and 5.6% in 2022.
“The outlook for the low-income developing country group has darkened considerably due to worsening pandemic dynamics. The downgrade also reflects more difficult near-term prospects for the advanced economy group, in part due to supply disruptions,” she mentioned.
Gopinath further stated that the aggregate output for the advanced economy group is likely to go back to pre-COVID levels in 2022 and may exceed 0.9% by 2024. The emerging market and developing economy group (excluding China), on the other hand, are expected to remain 5.5% below the pre-COVID forecast in 2024 leading to larger setback to improvements in their living standards.
The Indian American economist added that projections for commodity exporters have been upgraded due to rising commodity prices. Gopinath also listed down some solutions – vaccinating at least 40% of the population in every country by 2021-end and 70% by mid-2022.
In order to achieve this goal, high-income countries will have to fulfill existing vaccine dose donation pledges, prioritise deliveries to COVAX in the near-term and remove trade restrictions on vaccines and their raw materials.
Besides vaccination, Gopinath believes another urgent global priority is to contain the adverse effects of climate change.
“A policy strategy that includes an international carbon price floor adjusted to country circumstances, a green public investment and research subsidy push, and compensatory, targeted transfers to households can help advance the energy transition in an equitable way. Just as importantly, advanced countries need to deliver on their earlier promises of mobilising $100 billion of annual climate financing for developing countries,” she said.
Edited by Mehak Agarwal; with PTI inputs
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