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UN REPORT: Indian Economic recovery is steady but high oil prices may be bad news

The United Nations (UN) forecasts that India’s GDP would increase at a 6.5 percent annual pace in 2021-22, down from 8.4 percent in the previous fiscal year. The UN also stated that, while the economy is on a “solid path” due to rapid vaccination progress, coal shortages and high oil prices could put a brake on economic activity in the near term.

According to the United Nations’ flagship World Economic Situation and Prospects (WESP) 2022 report, India’s GDP is predicted to increase at 6.5 percent in the fiscal year 2022, down from 8.4 percent in the fiscal year 2021.

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According to the estimate, growth will fall even further in the financial year 2023, to 5.9%.

According to the analysis, India’s GDP is expected to grow by 6.7 percent in 2022, after increasing by 9% in the calendar year 2021, as base effects fade.

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The country’s GDP growth is expected to decrease to 6.1 percent in the calendar year 2023, according to the analysis.

The report also said that India’s economic recovery is on track, with rapid vaccine progress, fewer social constraints, and supportive fiscal and monetary policies.

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According to the WESP research, India’s economy is supported by strong export growth and state investments, but high oil prices and coal shortages might put a damper on development in the near term.

“Encouraging private investment to sustain inclusive growth beyond the recovery will be critical,” it concluded.

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The global economic recovery is being hampered by new waves of COVID-19 infections, ongoing labor market issues, persisting supply-chain challenges, and growing inflationary pressures, according to the research.

It also praised India for taking the “significant step” of committing to sourcing 50% of its energy from renewable sources by 2030 and attaining net-zero emissions by 2070.

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