The report added that higher prices and shortages of farming inputs, including fertilizers, are likely to persist in the region, negatively impacting the agricultural sector in Bangladesh, India, Pakistan, and Sri Lanka.
Digital Desk: India is still the fastest-growing major economy even as
the Ukraine conflict impacts the global gross domestic product (GDP). The UN
report shows that India is projected to grow by 6.4 per cent in 2022, slower
than last year’s 8.8 per cent, due to higher inflationary pressures and an
uneven recovery of the labour market, which curb private consumption and
investment.
The UN Department of Economic and Social Affairs said in its World
Economic Situation and Prospects (WESP) report released on Wednesday that the
war in Ukraine has upended the fragile economic recovery from the pandemic,
triggering a devastating humanitarian crisis in Europe, increasing food and
commodity prices and globally exacerbating inflationary pressures, PTI reported.
India’s GDP growth
“India, the region’s largest economy, is expected to grow by 6.4 per
cent in 2022, well below the 8.8 per cent growth in 2021, as higher
inflationary pressures and an uneven labour market recovery will curb private
consumption and investment,” according to the report.
India’s growth is forecast to be 6 per cent for the fiscal year 2023.
Hamid Rashid, Lead Author & Chief, Global Economic Monitoring
Branch, Economic Analysis and Policy Division, United Nations Department of
Economic and Social Affairs, told reporters at the UN Headquarters that almost
all regions in the world are affected by high inflation, except for East Asia
and South Asia.
“We expect the Indian recovery to remain strong in the near term, in the
next year or two, but again, we cannot completely discount the downside risk
from external channels. So that risk is still there,” he said.
The report added that higher prices and shortages of farming inputs,
including fertilizers, are likely to persist in the region, negatively
impacting the agricultural sector in Bangladesh, India, Pakistan, and Sri
Lanka.
“This will probably result in weaker harvests and exert further upward
pressures on food prices in the near term,” the report said.
It said that along with higher energy prices, elevated food prices would
likely increase food insecurity across the region. Consumer price inflation in
the region is expected to accelerate to 9.5 per cent in 2022, from 8.9 per cent
in 2021.
GLOBAL ECONOMY
The global economy is now projected to grow by only 3.1 per cent in
2022, down from the 4.0 per cent growth forecast released in January 2022.
Global inflation is projected to increase to 6.7 per cent in 2022, twice the
average of 2.9 per cent during 2010–2020, with sharp rises in food and energy
prices, it said.
“The war in Ukraine in all its dimensions is setting in motion a crisis
that is also devastating global energy markets, disrupting financial systems
and exacerbating extreme vulnerabilities for the developing world,” UN
Secretary-General Antonio Guterres said.
“We need quick and decisive action to ensure a steady flow of food and
energy in open markets by lifting export restrictions, allocating surpluses and
reserves to those who need them, and addressing food price increases to calm
market volatility,” he said.
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