The United Nations has raised India's growth forecast to 7.5 per cent for calendar year 2021, marking a 0.2 per cent increase from its projection in January, but said the country's outlook for the year remains highly fragile.

The surging COVID-19 infections and inadequate vaccination progress in many countries threaten a broad-based recovery of the world economy, said the World Economic Situation and Prospects report. It also projected India's GDP to grow by 10.1 per cent in 2022. "India has been particularly affected by a brutal second wave which is overwhelming the public health system in large parts of the country."

 

The UN report said the country has expanded vaccine eligibility and is ramping up supply in every possible manner but access to vaccines is unequal and insufficient to meet the massive demand. "Given the fluid situation, India's growth outlook in 2021 is highly fragile," it said.

The global economy is now projected to expand by 5.4 per cent in 2021 following a sharp contraction of 3.6 per cent in 2020, reflecting an upward revision from the UN forecasts released in January.

Amid rapid vaccinations and continued fiscal and monetary support measures, China and the United States ¬- the two largest economies - are on the path to recovery.

In contrast, the growth outlook in several countries in South Asia, sub-Saharan Africa, Latin America and the Caribbean remains fragile and uncertain.

For many countries, said the report, economic output is only projected to return to pre-pandemic levels in 2022 or 2023.

"Vaccine inequity between countries and regions is posing a significant risk to an already uneven and fragile global recovery," said UN Chief Economist Elliott Harris.

"Timely and universal access to Covid-19 vaccinations will mean the difference between ending pandemic promptly and placing the world economy on trajectory of a resilient recovery, or losing many more years of growth, development and opportunities."

For South Asia, already one of the hardest hit regions in the world, the crisis will last well into 2021. While a few smaller countries in the region have managed to roll out vaccinations, the largest economies continue to struggle to contain the increasing waves of infections.

"Regional economic growth will return in 2021 at 6.9 per cent against a 5.6 per cent drop in 2020 but the recovery will be very uneven, and the scarring effects will run deep," said the report.