After a coronavirus-induced fall of 9.6% last year, the United Nations sees the Indian economy recovering by 7.3% this calendar year. The UN's World Economic Situation and Prospects 2021 report released on Monday said that "despite drastic fiscal and monetary stimulus" India's gross domestic product (GDP) fell because of lockdowns and other containment efforts that "slashed domestic consumption without halting the spread of the disease."
India's GDP growth was forecast to dip in 2022 calendar year to 5.9%, according to the report.
China, where the COVID-19 pandemic started and spread bringing the rest of the world to its knees, was the only major economy to have grown last year, registering a 2.4% increase and is forecast to grow by 7.2% this year and by 5.8% next year, according to the report.
The global economy shrank by 4.3% last year and is forecast to grow by 4.7% this year and 5.9 % the next.
UN's Chief Economist Elliot Harris said, "The depth and severity of the unprecedented crisis foreshadows a slow and painful recovery."
He warned against the temptation to impose excessive fiscal austerity while the world recovers from the pandemic.
"As we step into a long recovery phase with the roll out of the vaccines against COVID-19, we need to start boosting longer-term investments that chart the path toward a more resilient recovery," he said.
He said that the world now needed "a redefined debt sustainability framework, universal social protection schemes, and an accelerated transition to the green economy."
The World Bank earlier this month forecast India's economy to fall by 9.6% during the current financial year but recover by 5.4% next financial year if there is wide vaccination against the disease and it is contained.
Compared to this, according to the UN estimates made on a fiscal basis for India, its economy was estimated to fall by only 5.7% in 2020-21 and increase by 7% in 2021-22 and 5.6% in 2022-23.
The International Monetary Fund is set to release on Tuesday its report on the economic scenario with growth forecasts.
(Arul Louis can be reached at arul.l@ians.in and followed on Twitter at @arulouis)