The World Bank has recently released the Global Economic Prospects (GEP) report. As per the GEP report, the global economic output is expected to grow by 4% in the year 2021. This projection has been made after considering the widespread roll-out of a COVID-19 vaccine throughout the year.
Key Points
- This estimation of economic output is still 5% below the pre-pandemic levels.
- India is projected to grow at 5.4% in financial year 2021-22 and at the rate of 5.2% in the financial year 2022-23.
- The contraction of the Indian economy is projected at 9.6% for 2020-21. This contraction is the result of a huge decline in household spending and private investment.
- As per the World Bank’s GEP report, there was a severe loss of income in the informal sector. However, the latest data show some recovery in the manufacturing and services sector.
- The global recovery has been decreased by the re-emergence of the coronavirus. However, the recovery is expected to improve as trade and consumption have started improving and the start of vaccinations will also be a major factor.
- The US economy is projected to contract by 3.6% in 2020 and it is expected that U.S. GDP will grow at 3.5% in the year 2021.
- Emerging market and developing economies (EMDEs) are projected to grow at an average of 4.6 percent in the year 2021-22. This reflects above-average growth in China.
- It is expected that the economy of China will grow at 7.9% in 2021 and at 5.2% in 2022.
South Asian Region Economic Slowdown
The economy of the South Asian region is likely to contract by 6.7 % in 2020 due to COVID-19. This contraction has been led by the deep recession in India. The economic growth in the South Asian region is projected to be 3.3 % in the year 2021 and 3.8% in 2022.
