InvestorQ : How is India’s GDP growth likely to pan out next year as compared to the other key major economies in the world?
diksha shah made post

How is India’s GDP growth likely to pan out next year as compared to the other key major economies in the world?

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swati Bakhda answered.
1 month ago
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The Organization for Economic Cooperation and Development or OECD, a global think tank on macro issues, expects India to be among the star growth stories in the coming financial year. In fact, the OECD expects India to be among the best GDP growth stories in calendar year CY22 among the large economies that have an annual GDP in excess of $2 trillion and also the fastest growing economy among the G-20 nations.

The OECD has noted that the recent US stimulus package worth $1.9 billion and the rapid vaccine rollout are likely to be major positives for the revival in growth in India and also across the world. The global GDP is expected to grow by 5.6% in CY21 and then taper to a more reasonable 4% in CY22. The rapid growth in CY21 will be more to compensate for the contraction that the world economy saw in CY21.

Talking specifically about the Indian economy, the OECD has forecast India's GDP to grow at 12.6% in FY22. If you look at the estimates, they are even better than the kind of estimates that the Ministry of Finance and the RBI have been putting out internally. For the Indian economy, this will mark a sharp turnaround from 7.4% contraction in FY21. OECD sees the global economy and Indian economy reverting to pre-pandemic GDP levels by mid-2021.

Of course, what also matters to India is how the largest importer from India, the United States grows next year. The OECD has sharply hiked its estimates for US GDP growth and raised the estimates to an attractive 6.5% in CY21 although it is expected to taper to 4% in CY22. OECD has also issued a warning note that the Indian recovery would predicate on ensuring no major Coronavirus relapses and also implementing a rapid vaccination drive. 

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