India, fastest-growing major economy, projected to grow 6.4% in 2022: U.N.

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

As the Ukraine conflict impacts the global GDP, India is projected to grow by 6.4% in 2022, slower than the last year’s 8.8% but still the fastest-growing major economy, with higher inflationary pressures and uneven recovery of the labour market curbing private consumption and investment, according to a United Nations report.

The U.N. 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.

The global economy is now projected to grow by only 3.1% in 2022, down from the 4.0% growth forecast released in January 2022. Global inflation is projected to increase to 6.7% in 2022, twice the average of 2.9% during 2010–2020, with sharp rises in food and energy prices, it said.

The report said that the outlook in South Asia has deteriorated in recent months, against the backdrop of the ongoing conflict in Ukraine, and higher commodity prices and potential negative spillover effects from monetary tightening in the United States.

The regional economic output is projected to expand by 5.5% in 2022, which is 0.4 percentage points lower than the forecast released in January.

“India, the largest economy in the region, is expected to grow by 6.4% in 2022, well below the 8.8% growth in 2021, as higher inflationary pressures and uneven recovery of the labour market will curb private consumption and investment,” it said.

For the fiscal year 2023, India’s growth is forecast to be 6%.