The World Bank positively projected on Tuesday that India's economy will grow at an annual rate of 8.3 percent in financial year 2021-22. Despite the devastating effects of the second wave, India is expected to maintain its robust growth rate. Prior to the second wave, the World Bank predicted that the economy would grow at a rate of 10.1 percent, down from 12 percent.
The rationale for the reassessment of India's economic development is because the World Bank feels that policy support would boost India's economic activity. Higher investment on infrastructure, rural development, and health, as well as better-than-expected advances in services and manufacturing, will be part of the comprehensive policy support.
This is in addition to the government's recent announcement of a growth-oriented stimulus package to boost the MSME, healthcare, and tourist sectors. A new outbreak, on the other hand, could necessitate “targeted policy support” to address the health and economic implications. Aside from the strong growth expected in FY 2021-22, the Indian economy is expected to grow faster than the world economy in FY22.
In its report, the World Bank stated that, the global economy will grow by 5.6 percent in 2021-22. It's worth noting that this will be the fastest recovery rate in 80 years. As previously stated, India's GDP is predicted to grow by 8.3% in fiscal year 2021-22, beginning in April 2021, which is 2.7 percent more than the world economy. As a result, India's GDP would grow at the second-fastest rate in FY22.
India will be the second-fastest-growing major economy after China, according to the World Bank's Global Economic Prospects study. China is expected to grow at an annual rate of 8.5 percent.
When it comes to GDP, World Bank projections for FY-22 for several nations The United States is anticipated to grow at 6.8%, Mexico at 5%, Brazil at 4.5 percent, and Indonesia at 4.4 percent. In FY23, India is expected to be the fastest-growing economy.
Growth is predicted to drop to 7.5 percent in the fiscal year 2022-23, due to the effects of Covid-19 on household, business, and bank balance sheets, likely poor consumer confidence, and increased uncertainty about job and income prospects. Nonetheless, India is expected to be the fastest-growing major economy in the financial year 2023, according to World Bank estimates.
The Reserve Bank of India (RBI) anticipates the GDP growth rate to be 9.5 percent in FY22. It has been revised from a previous estimate of 10.5%. GDP is expected to rise at 18.5 percent in Q1, 7.9 percent in Q2, 7.2 percent in Q3, and 6.6 percent in Q4 of FY 2021-22, according to this prediction.
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