According to a UN report, private consumption and investment will be curtailed by higher inflation and an uneven recovery on the labor market in 2022 as the Ukraine conflict affects global GDP. However, India is still expected to grow by 8.8% in 2022.
Global inflationary pressures have been ratcheted up as a result of Ukraine’s war, according to a UN report released on Wednesday. The conflict has triggered a devastating humanitarian crisis in Europe and has increased food and commodity prices, which have pushed up prices around the world.
Only 3.1 percent growth in the global economy is forecast for the year of 2022, down from the original 4.0 percent growth estimate.
Food and energy prices are expected to rise rapidly, pushing global inflation to 6.7% in 2022, more than double the 2.9% average seen between 2010 and 2020, according to the report.
With rising commodity prices and possible negative spillover effects from US monetary tightening weighing on South Asia’s economic prospects, a report stated that the outlook has worsened in recent months.
The region’s economic output is expected to grow by 5.5% in 2022, which is 0.4 percentage points less than the January forecast.
As inflationary pressures rise and the labor market recovers unevenly, India’s growth in 2022 is expected to be 6.4 percent, well below the 8.8 percent growth it saw in 2021, according to the report.
India’s GDP is expected to grow by 6% in fiscal year 2023.