India To Be The Fastest-Growing Economy Of 2021: IMF

New Delhi: India is projected to grow at the rate of 11.5% in 2021, the highest globally and the only economy to grow in double digits, according to International Monetary Fund (IMF) World Economic Outlook Update. ALSO READ | Budget 2021 Paperless: Covid-19 Impact Budget Traditions, Govt To Go Digital With 'Union Budget Mobile App'

With a projected growth rate of 8.3% for 2021, China will be the second-fastest-growing economy after India, pegging the emerging markets and developed economies' growth rate to 6.3% in 2021.

India will lead the global growth rate in 2022 as well, with a projected growth rate of 6.8%, ahead of China's growth rate of 5.6%, according to the IMF. 

Although recent vaccine approvals have raised hopes of a turnaround in the pandemic later this year, renewed waves and new variants of the virus pose concerns for the outlook.

India has estimated to have a negative growth rate of -8% for 2020. Other countries with higher negative growth than India in 2020 include the United Kingdom at -10% and Spain at -11.1%, Italy at -9.2%, France at -9%, and Mexico at -8.5%. China, on the other hand, had grown at the rate of 2.3% for 2020. 

Amid exceptional uncertainty, the global economy is projected to grow 5.5 % in 2021 and 4.2% in 2022. The 2021 forecast is revised up 0.3 percentage point relative to the previous forecast, reflecting expectations of a vaccine-powered strengthening of activity later in the year and additional policy support in a few large economies.

The United States (US), with estimated negative growth of -3.4% in 2020, is expected to grow at 5.1% in 2021 and 2.5% in 2022, while the Euro area with estimated negative growth of -7.2% in 2020 is expected to grow at 4.2% in 2021 and 3.6% in 2022. 

This year's projected growth recovery follows a severe collapse in 2020 that has had acute adverse impacts on women, youth, the poor, the informally employed, and those who work in contact-intensive sectors. The global growth contraction for 2020 is estimated at -3.5%, 0.9 percentage point higher than projected in the previous forecast (reflecting stronger-than-expected momentum in the second half of 2020).

According to the IMF, the recovery's strength is projected to vary significantly across countries, depending on access to medical interventions, the effectiveness of policy support, exposure to cross-country spillovers, and structural characteristics entering the crisis.

Policy actions should ensure adequate support until the recovery is firmly underway, emphasizing advancing key imperatives of raising potential output, ensuring participatory growth that benefits all, and accelerating the transition to lower carbon dependence. 

As noted in the October 2020 World Economic Outlook (WEO), a green investment push coupled with initially moderate but steadily rising carbon prices would yield needed emissions reductions while supporting the pandemic recession's recovery.

Strong multilateral cooperation is required to bring the pandemic under control everywhere. Such efforts include

bolstering funding for the COVAX facility to accelerate access to vaccines for all countries, ensuring universal distribution of vaccines, and facilitating access to therapeutics at affordable prices for all.

Many countries, particularly low-income developing economies, entered the crisis with high debt set to rise further during the pandemic. The global community will need to continue working closely to ensure adequate international liquidity access for these countries. Where sovereign debt is unsustainable, eligible countries should work with creditors to restructure their debt under the Common Framework agreed by the G20.