Thu, 20 Jan 2022

India to lead global economic growth in 2021

ANI/Big News Network
27 Jan 2021, 16:19 GMT+10

New Delhi [India], January 27 (ANI/Big News Network): India will reclaim the status of the world's fastest-growing economy, and will be the only economy that will grow in double-digits in 2021, projected the International Monetary Fund (IMF).

In its latest World Economic Outlook update released on Tuesday, the IMF predicts that India's gross domestic product (GDP) will grow at the pace of 11.5 per cent in 2021. The report puts India well ahead of China, which will grow at 8.1 per cent, followed by Spain (5.9 per cent), France (5.5 per cent) and the United States (5.1 per cent).

Last October IMF had projected an 8.8 per cent real GDP growth for India. Notable revisions of 2.7 per cent have been added to the forecast, reflecting carryover from a stronger-than-expected recovery in 2020 after lockdowns were eased.

Releasing the new projections, the IMF report says that although recent vaccine approvals have raised hopes of a turnaround in the pandemic later this year, renewed waves and new variants of the virus pose concerns for the outlook. Amid exceptional uncertainty, the global economy is projected to grow 5.5 per cent in 2021 and 4.2 per cent in 2022.

The 2021 forecast is revised up 0.3 percentage point relative to the previous forecast, reflecting expectations of a vaccine-powered strengthening of activity later in the year and additional policy support in a few large economies.

The report further says that third-quarter GDP outturns mostly surprised on the upside (Australia, the Euro area, India, Japan, South Korea, New Zealand, Turkey, the United States) or were in line with expectations elsewhere (China, Mexico).

Among components, private consumption rebounded the most. Investment picked up relatively slowly, except in China. The expenditure decompositions suggest a release of pent-up demand and adjustments to telework.

Given the largely one-off nature of such spending, it is likely to dissipate once the adjustments are made. High-frequency data suggest some tapering into the fourth quarter of 2020--for example, in new orders, industrial production, and global trade. (ANI/Big News Network).

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