India to grow slower at 1.2%: UN

dubai — The United Nations has slashed India’s economic growth projection for the current fiscal year to 1.2 per cent, while forecasting a gloomier scenario of a deep economic contraction by 3.2 per cent this year for a world ravaged by Covid-19.

The dismal global outlook is the sharpest downturn since the Great Depression in the 1930s.

“We are now facing the grim reality of a severe recession of a magnitude not seen since the Great Depression,” said UN chief economist Elliott Harris.

Despite a slower growth forecast than the previously predicted rate, India would still record the second-highest growth rate among major economies, trailing only China, according to the UN mid-year World Economic Situation and Prospects (WESP) update.

The 1.2 per cent estimate for India for the current year is a drastic Covid19-fuelled cut from the 6.6 per cent made in January by the UN Department of Economic and Social Affairs.

The UN projection for India in the current fiscal year is less than the 1.9 per cent made by the International Monetary Fund (IMF) last month.

The WESP update expects India’s rate of gross domestic growth to increase to 5.5 per cent in the next fiscal year (2021-22) while reducing the third largest Asian economy’s growth rate for the last fiscal year to 4.1 per cent from the 5.7 per cent estimated in January.

China is expected to grow by 1.7 per cent this year and increase its rate to 7.6 per cent next year.

According to the update, as the global economy shrinks by 3.2 per cent this year, the developed countries will bear the brunt with their economic growth dropping by five per cent, according to the update. The UN expects South Asia’s economies overall to shrink by 0.6 per cent during the current year.

“The global economy is expected to lose nearly $8.5 trillion in output over the next two years due to the Covid-19 pandemic, wiping out nearly all gains of the previous four years. The sharp economic contraction, which marks the sharpest contraction since the Great Depression in the 1930s, comes on top of anaemic economic forecasts of only 2.1 per cent at the start of the year,” the UN update said.

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