World Bank retains India’s growth outlook for FY22 at 8.3% – Times of India

NEW DELHI: The World Bank on Tuesday retained India’s economic growth forecast at 8.3 per cent for fiscal year 2021-22.
The World Bank has kept India’s growth estimate unchanged since June 2021 outlook as the recovery is yet to become broad-based.
In its Global Economic Prospects, World Bank said that the economic damage caused by second Covid wave has already been unwound with output back to pre-Covid time after relaxation of restrictions.
World Bank’s projection of 8.3 per cent is lower than the government’s first advance estimates of gross domestic product (GDP) of 9.2 per cent released last week and 9.5 per cent projected by the Reserve Bank of India (RBI).

“The economy should benefit from the resumption of contact-intensive services, and ongoing but narrowing monetary and fiscal policy support,” the report said.
However, sectors particularly sensitive to the pandemic, like trade and hospitality has lingered and remains below pre-pandemic levels.
In terms of inflation, easing supply disruptions and deficient demand has led to rise in prices. Core inflation remains at the upper end of the Reserve Bank of India’s (RBI) 2 per cent-6 per cent target range.
While, the forecast for 2022-23 and 2023-24 has been upgraded to 8.7 per cent and 6.8 per cent, respectively. This is mainly on account of higher investment from the private sector, particularly manufacturing, benefiting from the production-linked incentive (PLI) scheme, and increases in infrastructure investment.
“The growth outlook will also be supported by ongoing structural reforms, a better than-expected financial sector recovery, and measures to resolve financial sector challenges despite ongoing risks,” it added.
Meanwhile, GDP projection for US was cut by 1.2 percentage points to 5.6 per cent, and forecast sharply lower growth of 3.7 per cent in 2022 and 2.6 per cent in 2023.
China’s GDP was expected to expand by 8 per cent in 2021, about 0.5 percentage point less than previously forecast, with growth seen slowing to 5.1 per cent in 2022 and 5.2 per cent in 2023.
WEF lists top five risks faced by India
In a separate report released by the World Economic Forum, it listed top 5 risks that India faces.
The Global Risks Report 2022 said India may face the following five risks:
* Fracture of interstate relations;
* Debt crisis;
* Widespread youth disillusionment;
* Failure of technology governance; and
* Digital inequality
It further said that globally governments are struggling to adopt climate-smart policies as Covid-19 hits economic activity and forces them to focus instead on tackling surging social inequality.
Threats to social cohesion, such as widening income and wealth inequality and huge differences in access to vaccines around the world, emerged as another major worry in the WEF poll of nearly 1,000 business, government and academic leaders.
Besides, the report said, as the world enters the third year of the Covid-19 pandemic, a growing dependence on digital systems has heightened the risks posed by cybersecurity threats globally.
(With inputs from agencies)

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