Economist Intelligence Unit calculates 13 percent growth for India, more than IMF prediction
The forecast of India's growth is higher than any other major economy in the world including US
The Economist Intelligence Unit (EIU) has pegged India's economic growth for the year 2021 at 13 per cent which is more than what the International Monetary Fund (IMF) had predicted. The global monetary body had recently projected a 12.5 percent growth rate for FY 2021-22, which would be more than China.
“The economy is forecast to rebound by 13% in fiscal year 2021/22 (April-March), after contracting by an estimated 7% in 2020/21,” EIU said in its report.
The forecast of India's growth rate for 2021 is noted to be higher than any other major economy in the world including the US which is calculated to be 5.5 per cent. Also, the EIU forecasted India's growth rate for the current year higher than the calculation of RBI's Monetary Policy Committee i.e. 10.5 per cent.
EIU, in its report, said that the ongoing protests will only delay the implementation of agricultural reforms and we do not expect the government to face a strong push back on its labour reforms and privatisation efforts.
“The ruling coalition is expected to stay in power until the end of its term in 2024. Tensions with China will remain escalated but will not lead to a large-scale conflict,” it added.
The IMF had predicted the world economy to expand 6 per cent in 2021, up from the 5.5 percent it had forecast in January. It would be the fastest expansion for the global economy in IMF records dating back to 1980.
"In 2022, the IMF predicts, international economic growth will decelerate to a still strong 4.4%, up from its January forecast of 4.2 per cent. A way out of this health and economic crisis is increasingly visible," IMF chief economist Gita Gopinath told reporters.
The agency's economists have estimated that the global economy shrank 3.3 per cent in 2020 after the devastating recession that followed the coronavirus' eruption across the world early last spring. That is the worst annual figure in the IMF's database, though not as severe as the 3.5 per cent drop it had estimated three months ago.
Without USD 16 trillion in global government aid that helped sustain companies and consumers during COVID-19 lockdowns, IMF forecasters say, last year's downturn could have been three times worse.
Even the World Bank has predicted that the country's real GDP growth for fiscal year 21/22 could range from 7.5 to 12.5 per cent.
The Washington-based global lender, in its latest South Asia Economic Focus report said that the economy was already slowing when the COVID-19 pandemic unfolded. It said that after reaching 8.3 per cent in FY17, growth decelerated to 4.0 per cent in FY20.