The Indian economy is projected to grow at 7.3 per cent in the ongoing fiscal year and has contracted by approximately 9.6 per cent 🐟in 2020, the UN has said. 2020's economic output was impacted by lockdowns and other efforts to control the Covid-19 pandemic, 𒁏which slashed domestic consumption.
The report, produced by the United Nations Department of Economic and Social Affairs (UN DESA), is titled World Economic Situ💦ation and Prospects 2021.
It highlighted that the global economy shrank by 4.3 per cent la♊st year, over two-and-a-half times more than during thꦆe global financial crisis of 2009. The modest recovery of 4.7 per cent expected in 2021 would barely offset the losses of 2020.
The world econom⛄y was hit by a once-in-a-century crisis — a Great Disruption brought on by the Covid-19 pandemic in 2020, it said.
"Th👍e devastating socio-economic impact of the Covid-19 pandemic will be felt for years to come unless smart investments in econo🌌mic, societal and climate resilience ensure a robust and sustainable recovery of the global economy,” the report said.
The Indian econ💝omy, which grew at 4.7 per cent in 2019, will contract by 9.6 per cent in the calendar year 2020, “as lockdowns and other containment efforts slashed domestic consumption without halting the spread of the disease, despite drastic fiscal and monetary stimulus".
India's economic grow🐟th is forecast to be 7.3 per cent in 2021, the fastest-growing ma♊jor economy with only China coming in a close second with a 7.2 per cent projected growth rate in the calendar year 2021, the report said.
According to the fiscal y𝓀ear 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 per cent growth rate in the 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, a♑t 6.9 per cent, to make up for the losses of 2020, as pandemic hotspots re-emerge and, increasingly, the ability of governments t♍o 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 i🧜nto the worst-performing region in 2020.
“While trade, remittances and investment are expected to pick up in ꧃2021, as much of the global economy moves towards recovery from the widespread lockdown, investment and domestic consumption in many South Asian countries will nevertheless remain subdued owing to the continuing tꦅhreat of the pandemic and the scarring effects of the crisis,” it said.
Regional economic growth for 2022 is forecast at ♎5.3 per cent, which would༒ allow South Asia to finally exceed its 2019 economic output, albeit only marginally.
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.
Policymakers in South Asia will need to strengthen their efforts to formalise labour markets and strengthen social protectio༒n systems to dampen the impact of the crisis on the most vulnerable and improve macroeconomic resilience, the report said.
Informal workers, accounting for over 80 per cent of workers in Bangladesh, India and Pakistan have indeed been fa⛦r more exposed to loss of employment than formal workers during the crisis and South Asia’s widespread informality ha🐎s almost certainly magnified the impact of the pandemic, it noted.
The report said the Covid-19 fiscal re🏅sponse in South Asia has consisted of a vast ad hoc expansion of social assistance and direct cash trans🔯fers for the neediest, but this kind of special support is neither sufficient nor sustainable.
By April, full or partial lockdown measures had affected almost 2.7 billion workers, representing about 81 per cent of the🍃 world’s workforce. By mid-2020, unemployment rates had quickly escalated to record highs: 27 per cent in Nigeria, 23 per cent in India and 21 per cent in Colombia.
The report noted that the pandemi♉c exposed how stark inequality affected the ability of people to cope with the economic impact of theﷺ crisis.
The report said the livelihood and income impacts have been particularly harsh for about 2 billion informal workers with limited social protection, especially those se♈lf-employed in the informal economy. The informal sector accounts for more than 60 pꦡer cent of jobs in a number of large developing countries, including India, Indonesia and Mexico.
It also took note that a few of the Sustainable Development Goals have seen some progress, but without sustained action, this progress will be fleeting. Ambient water quality improve🦂d during lockdowns, for example, in the Yamuna River and Sabarmati River in India.
The report said th꧟e share of services in total value added has ri🅺sen steadily, from 60 per cent of GDP in 2000 to 65 per cent in 2017.
The importance of the services sector has risen sharply in oth💦er large de꧋veloping economies, such as Brazil and India, it said.
Among the developing🅘 economies, services trade is, however, highly concentrated. Just five economies (China, Hong Kong, India, South Korea and Singapore) accounted for more than 50 per cent of services exports from developing co🦩untries in 2017.
While India stands out in terms of building competitive services exports, there are also other cases that are worth highlightiꦚng like Mauritius and Senegal, the report sa🐻id.
With PTI inputs
