OECD cuts India's economic growth forecast to 9.7% for current fiscal

The Organisation for Economic Co-operation and Development (OECD) in its latest report has cut its projection of India's economic growth by 0.2 percentage points to 9.7 per cent for the current financial year (FY22). The economy was projected to grow by 7.9 per cent next financial year, 0.3 percentage point slower than pegged by it earlier. If the projections come out to be correct, India's economy would be the fastest growing large economy in both these years. It would be followed by China at 8.5 per cent in 2021 and Spain at 6.6 per cent in 2022. China is pegged to be slowing down to 5.8 per cent in the next calendar year.

OECD said high-frequency activity indicators, such as the Google location-based measures of retail and recreation mobility, suggest global activity continued to strengthen in recent months, helped by improvements in Europe and a marked rebound in both India and Latin America.

However, it said the gap between output in India's economy from pre-pandemic level is projected to be too high. The output shortfall from the pre-pandemic path at the end of 2022 in the median G20 emerging-market economy is projected to be twice of that in the median G20 advanced economy, and particularly high in India and Indonesia. Besides, it projected consumer price inflation in India to fall to 5.9 per cent in the current financial year compared to 6.2 per cent in the previous year. At this rate, the inflation would be a tad lower than the upper range of the Reserve Bank of India's upper tolerance range -- six per cent. OECD saw inflation fall to 5.5 per cent next year.