After falling into a recession for the first time in a quarter of a century, India’s economy should is likely to recover in 2021.
According to a forecast published Tuesday by the Organization for Economic Cooperation and Development, India’s gross domestic product is projected to increase by 12.6% during the country’s fiscal year starting in April.
If that level of growth is achieved, India will reclaim its status as the fastest-growing major economy. India’s economy posted an increase in a gross domestic product of 0.4% in the final three months of the last year, ending its recession. In 2020, the Indian economy declined by around 7%.
The OECD also revealed major upgrades to its global outlook, saying that economic prospects have improved markedly in the last months, thanks to the deployment of COVID-19 vaccines and additional stimulus announcements.
The OECD now anticipates the world economy to expand by 5.6% in 2021, an advance of over one percentage point from its estimate in December.
CRISIL announced India’s GDP is likely to reach the pre-pandemic level only by the second quarter of 2022. By the end of fiscal 2021-22, GDP will only be around 2% higher than the fiscal year 2019-2020 level and 10% below its pre-pandemic trend level.
The rating and research agency announced India’s GDP growth would average to 6.3% between 2022-23 and 2024-2025, which would be higher than the average of 5.8% in the prior three years.
According to CRISIL, despite the growth, the Indian economy will witness a permanent loss of 11% of GDP in real terms over fiscal years 2022-2025.
The U.S. and U.K are likely to increase by 6.5% and 5.1%, respectively
The U.S. economy is likely to increase by 6.5% in 2021, over three percentage points higher than the December estimate.
The agency pointed to the effects of robust fiscal support from President Joe Biden’s $1.9 trillion stimulus package.
In Europe, where the vaccine rollout has been slow outside of America, the OECD prognosticates a more gradual upturn. The 19 countries that use the euro are anticipated to witness an output increase by 3.9%. The U.K. economy, which was hit harder than its European neighbors in 2020, will rise by 5.1%.