The forecast for the sovereign remains unchanged from its July update. However, the growth forecast is a three per cent drop compared to the 2021 forecast published in April this year.
International Monetary Fund sees that the Indian economy would grow by 8.5 per cent in 2021 and 9.5 per cent in 2022. The forecast was published in its 'World Economic Outlook' revealed on Tuesday. The forecast for the sovereign remains unchanged from its July update. However, the growth forecast is a three percentage points drop compared to the 2021 forecast published in April this year.
How does India fare in comparison?
The United States is expected to grow at 5.2 per cent in 2022 whereas China is expected to grow at 5.6 per cent for the same time period.
The report informed that compared to the July forecast, the global growth projection had been marginally scaled downwards to 5.9 per cent for 2021. The projection for 2022, however, remains unchanged.
COVID-19 disruptions in low-income countries
It added that the growth projection conceals how low-income developing countries have been worse-off owing to worsening pandemic dynamics. The downgrade further points to difficult near-term prospects for advanced economies as supply disruption continue to bother them.
The pandemic has spelt disruptions to contact intensive sectors which now lag the output recovery in most countries.
The projection for some commodity exporters has been upgraded with the rising commodity prices. They have been able to partially offset some of the changes caused to the economy by the pandemic.
Global vaccination targets
IMF proposes that concrete and cost-effective steps must be laid out to vaccinate at least 40 per cent of the population in each country by the end of the year and 70 per cent by 2022. It, therefore, becomes more crucial to ensure that financially constrained countries are able to continue their essential spending as well as meet their obligation.
"Over half of the countries in the world— accounting for 35 per cent of the global population—are not on track to achieve the 40 per cent mark by the end of 2021 There is an urgent need for vaccine donations by countries with large shares of their population already vaccinated," the report states.
The report estimates that about 1 billion doses of the COVID-19 vaccines could be shared by countries without compromising on their own national vaccination targets.
"This will require high-income countries to fulfil existing vaccine dose donation pledges, coordinate with manufacturers to prioritise deliveries to COVAX in the near-term and remove trade restrictions on the flow of vaccines and their inputs,” the report said.