Indian economy estimated to grow at 7.3 per cent in 2021: UN

India's economy is projected to grow at 7.3 per cent in 2021, even as it is estimated to contract by 9.6 per cent in 2020 as lockdowns and other efforts to control the COVID-19 pandemic slashed domestic consumption. The World Economic Situation and Prospects 2021, produced by the United Nations Department of Economic and Social Affairs (UNDESA), stated that the world economy was hit by a once in a century crisis, a Great Disruption unleashed by the COVID-19 pandemic in 2020.

The global economy shrank by 4.3 per cent last year, over two and a half times more than during the global financial crisis of 2009. The modest recovery of 4.7 per cent expected in 2021 would barely offset the losses of 2020.

India's economic growth is forecast to be 7.3 per cent in 2021, the fastest growing major economy with only China coming in a close second with a 7.2 per cent projected growth rate, the report said. According to the fiscal year estimates released in the report, India’s economy is estimated to decline by 5.7 per cent in 2020 and will return to a 7.3 per cent growth rate in fiscal year 2021, slowing down again to 5.6 per cent in 2022. The report said economic growth in South Asia in 2021 will be insufficient, at 6.9 per cent, to make up for the losses of 2020, as pandemic hotspots re-emerge and, increasingly, the ability of governments to deal with the multitude of challenges becomes exhausted.

The pandemic and the global economic crisis have consequently left deep marks on South Asia, turning this former growth champion into the worst performing region in 2020. On the other hand, South Asian countries that are relatively more exposed to global economic conditions, such as Bangladesh and Maldives with their high share of foreign trade and Nepal with its dependence on tourism and remittances, will enjoy a stronger rebound, of about 10 per cent growth in 2021.

Source: Economic Times