INDIA IS PROJECTED TO GROW OVER 7% AMIDST GLOBAL DECELERATION

"The war in Ukraine, lockdowns in China, supply-chain disruptions, and the risk of stagflation are hampering growth.

- Tushar K Mahanti

For many countries, the recession will be hard to avoid," is how World Bank President David Malpass has summed up the crisis of the present world economy. The World Bank's June 2022 Global Economic Prospects report has warned that the world economy has been devastated by the fallout of geopolitical conflict, which threatens to disrupt the global recovery that was slowly making its way through multiple waves of the coronavirus pandemic and its numerous mutations.

The global GDP growth is projected to sharply decelerate from 5.7% in 2021 to 2.9% in 2022 - 1.2 percentage points lower than the projection of 4.1%, made by the bank last January. Growth in advanced economies is feared to be lower by a huge 2.5 percentage points in 2022 from 5.1% in 2021 to 2.6% now. In the January 2022 World Bank report, the GDP growth of advanced economies for 2022 was estimated at 3.8%. GDP growth is expected to further moderate to 2.2% in 2023, largely reflecting the unwinding of the fiscal and monetary policy support provided during the pandemic.

The economic growth of the emerging markets and developing economies is projected to fall from 6.6% in 2021 to 3.4% in 2022 well below the annual average of 4.8% over the 2011-2019 period. This growth slowdown is a price of war which will be paid through lower incomes and fewer job opportunities. The growth will be further affected by high price rise causing demand deceleration and disruption in economic activities. High food and energy prices and the continued worsening of supply-chain problems imply that consumer price inflation will peak later and at higher levels than previously fore.