United Nations, May 13 (IANS) The UN on Tuesday slashed India’s economic growth projection for the current fiscal year to 1.2 per cent, which would still be the second-highest growth rate among major economies, trailing only China.
The mid-year World Economic Situation and Prospects (WESP) update expects India’s rate of gross domestic growth to increase to 5.5 per cent in the next fiscal year.
The growth rate for the world ravaged by Covid-19 is projected to shrink by 3.2 per cent this year, with the developed countries bearing the brunt with their economic growth dropping by 5 per cent, according to the update.
The 1.2 per cent estimate for India for the current year is a drastic Covid-19-fuelled cut from the 6.6 per cent made in January made by the UN Department of Economic and Social Affairs.
China is expected to grow by 1.7 per cent this year and increase its rate to 7.6 per cent next year.
The WESP update reduced India’s growth rate for the last fiscal year to 4.1 per cent from the 5.7 per cent estimated in January.
The UN projection for the current fiscal year is less than the 1.9 per cent made by the International Monetary Fund (IMF) last month.
The UN expects South Asia’s economies overall to shrink by 0.6 per cent during the current year.
The UN update said, “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.”