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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 per cent, according to the report.
China, where the Covid-19 pandemic started and spread bring the rest of the world to its knees, was the only major economy to have grown last year, registering a 2.4 per cent increase last and is forecast to grow by 7.2 per cent this year and by 5.8 per cent next year, according to the report.
The global economy shrank by 4.3 per cent last year and is forecast to grow by 4.7 per cent this year and 5.9 per cent 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 per cent during the current financial year but recover by 5.4 per cent 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 per cent in 2020-21 and increase by 7 per cent in 2021-22 and 5.6 per cent 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 email@example.com and followed on Twitter at @arulouis)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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First Published: Tue, January 26 2021. 07:01 IST