The Organization for Economic Co-operation and Development (OECD) has raised the projection for India’s economic growth rate by 4.7 percentage points at 12.6 per cent for 2021-22.
That would enable India to retain its earlier tag of the fastest growing large economy in the world. In its interim report on economic outlook, OECD said, activity moved above pre-pandemic levels in India, helped by strong fiscal and quasi-fiscal measures and a recovery in manufacturing and construction.
It, however, pegged economic growth rate to come down to 5.4 per cent in 2022-23, which would be higher by 0.6 percentage points than its earlier estimates. That year, India would share its fastest-growing large economy tag with Indonesia, according to the OECD.
The Indian economy was projected to decline by 8 per cent in the current fiscal year. However, OECD believes that contraction would be less steep at 7.4 per cent.
In the report, titled Strengthening the recovery: The need for speed, OECD said fiscal measures announced in India and a few other countries would help growth in 2021-22 as well.
Additional discretionary fiscal measures announced in several countries during the past three months will add to the overall support, including in the US, Japan, Germany, Canada, and India, the report said.
The OECD also unveiled major upgrades to its global outlook, saying that economic prospects have improved markedly in recent months thanks to the deployment of coronavirus vaccines and additional stimulus announcements.