Sunday, January 23, 2022

India to be fastest-growing economy in the world in 2021 & 2022: IMF projection

The International Monetary Fund (IMF) has retained its forecast of India’s economic growth at 9.5 per cent in 2021 and 8.5 per cent in 2022. The IMF has also lowered the global growth outlook for 2021 by 10 basis points to 5.9 per cent due to the deteriorating Covid dynamics and supply interruption.

In its World Economic Outlook (WEO), the IMF has retained India’s gross domestic product (GDP) forecast for the next fiscal at 8.5 per cent, unchanged from the July estimates. Meanwhile, the IMF has slashed China’s GDP growth projections for 2021 and 2022 by 10 basis points to 8 and 5.6 per cent, respectively.

India’s consumer price index-based inflation rate to be at 5.6% in 2021

The IMF has projected India’s Consumer Price Index-based inflation rate for the current fiscal to be 5.6 per cent from 6.2 per cent in the previous year. For the next financial year, it is expected to decline further to 4.9 per cent.

In its policy review last week, the Monetary Policy Committee also lowered its retail inflation forecast for FY22 to 5.3 per cent from its earlier forecast of 5.7 per cent.

USA and China growth rate in 2021 & 2022

The USA is projected to grow at 6 per cent this year and 5.2 per cent next year. On the other hand, China is projected to grow at 8 per cent in 2021, 0.1 percentage points lower than its July estimate and 5.6 per cent in 2022.

Compared to the July forecast, the global growth forecast for 2021 has been revised down marginally to 5.9 per cent and for 2022 remains unchanged at 4.9 per cent.

Top countries with highest GDP growth in 2021

1. India – 9.5%
2. China – 8.0%
3. U.K. – 6.8%
4. France – 6.3%
5. Mexico- 6.2%
6. USA – 6.0%
7. Italy – 5.8%

Top countries with highest GDP growth in 2022

1. India – 8.5%
2. Spain – 6.4%
3. China – 5.6%
4. USA – 5.2%
5. U.K. – 5.0%
6. Canada – 4.9%
7. Germany – 4.6%

Outlook for the low-income developing country group

“The outlook for the low-income developing country group has darkened considerably due to worsening pandemic dynamics”, IMF Chief Economist Gita Gopinath said.

“The downgrade also reflects more difficult near-term prospects for the advanced economy group, in part due to supply disruptions. Partially offsetting these changes, projections for some commodity exporters have been upgraded on the back of rising commodity prices,” Gopinath added.

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