UN Report scales down India’s expected growth rate numbers in FY’22

New Delhi: A United Nations report has scaled down India's economic growth projections from 8.4% to 6.5% for FY'22. "Indian economy is set to grow at the rate of 6.5% in FY'22, down from the earlier forecast of 8.4% amid rapid vaccination progress, the United Nations said Wednesday. The flagship United Nations World Economic Situation and Prospects (WESP) 2022 report launched on Thursday, January 13, however, said that "India's economic recovery is on a solid path, amid rapid vaccination progress, less stringent social restrictions and still supportive fiscal and monetary stances."

The report mentioned that India's GDP is forecast to grow at 6.5 per cent in the fiscal year 2022, a contraction from the estimated growth of 8.4 per cent in the fiscal year 2021. Growth is projected to further slow down to 5.9 per cent in the financial year 2023, the report said.

India's GDP may grow 9.2% in the current financial year ending March 2022, according to the first advance estimates. The economy has gained momentum during the July-September period, inching gradually back to normalcy as coronavirus related disruptions eased significantly in the aftermath of a devastating second wave.

The report noted that for India, robust export growth and public investments underpin economic activity, but high oil prices and coal shortages could put the brakes on economic activity in the near term.

"It will remain crucial to encourage private investment to support inclusive growth beyond the recovery," it added.

GDP for the second quarter of the financial year grew by 8.4% from a year ago, one of the fastest rates among major economies, data released by the government showed on Tuesday.

Reserve Bank of India (RBI) has projected a GDP growth rate of 9.5% for the current financial year with inflation seen at 5.3%.

The projection is less than the 9.5% forecast by the International Monetary Fund (IMF) and S&P, while Moody's Investors Service had in recent weeks put India's growth forecast at 9.3%. Fitch Ratings has projected an 8.7% expansion.

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