World Bank’s ‘Global Economic Prospects (GEP)’ Report

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.