NEW DELHI: The Organisation for Economic Co-operation and Development (OECD) raised India’s GDP growth forecast to 12.6% for 2021-22, supported by strong fiscal and quasi-fiscal measures.
The OECD also estimated GDP to contract by 7.4% in the current fiscal year, slower than the earlier projection of an 8% decline. For FY22, it had earlier estimated the economy to grow by 7.9%. It expects China to grow by 7.8% in 2021-22.
In its latest economic outlook, the OECD said the recovery in activity continued in the fourth quarter of 2020, despite new virus outbreaks in many economies and tighter containment measures. “Global output remained around 1% lower than prior to the pandemic, with marked variation in the pace of recovery across economies. The rebound has been relatively fast in several large emerging-market economies. Activity moved above pre pandemic levels in China, India and Turkey, helped by strong fiscal and quasi-fiscal measures and a recovery in manufacturing and construction,” it said.
The Indian economy has recovered swiftly after being hit hard by the pandemic-induced lockdown. The IMF has projected an 11.5% growth for FY22, making it one of the fastest growing major economies. Growth returned to positive territory in the December quarter as economic activity gathered pace. The rollout of the vaccination programme is also expected to add to optimism.