NEWS

India’s projected economic growth for 2022 has been downgraded by over two per cent to 4.6% as per UN Conference on Trade and Development (UNCTAD) report

WHAT DID THE REPORT SAY

• The decrease is attributed to the ongoing war in Ukraine
• India is expected to face restraints on energy access and prices, reflexes from trade sanctions, food inflation, tightening policies and financial instability
• Downgraded global economic growth projection for 2022 to 2.6% from 3.6%
• Changes in macroeconomic policies put developing countries particularly at risk
• Russia will experience a deep recession this year, significant slowdowns in growth are expected in parts of Western Europe and Central, South and South-East Asia
• Other economies in South and Western Asia may gain some benefits from fast growth of demand and prices of energy, they will be hampered by the adversities in primary commodity markets, especially food inflation, and will be further hit by inherent financial instabilities
• India in particular will face restraints on several fronts: energy access and prices, primary commodity bottlenecks, reflexes from trade sanctions, food inflation, tightening policies and financial instability
• The report has downgraded the GDP growth of the US from three per cent to 2.4 per cent. China will also see growth decrease to 4.8 per cent from 5.7 per cent. The report projects a deep recession for Russia, with growth decelerating from 2.3 per cent to -7.3 per cent
• UNCTAD is worried that a combination of weakening global demand, insufficient policy coordination at the international level and elevated debt levels from the pandemic, will generate financial shockwaves that can push some developing countries into a downward spiral of insolvency, recession and arrested development.