Fitch Ratings upgrades India's medium-term growth projection to 6.2%

In its latest Global Economic Outlook report released recently, Fitch raised the projection by 0.7 percentage points from 5.7 per cent estimated for the 2013-2022 period, primarily due to improved employment rate and better working-age population forecast.

The country’s labour productivity forecast is also higher, the report said. India is among the countries that have largest downward revisions to labour inputs relative to 2019.

China’s supply-side growth potential has been lowered to 4.6 per cent from 5.3 per cent. The Asian giant’s labour supply outlook is also weakening, reflecting demographics and falls in the labour force participation rate, the report said.

“The 2020 pandemic-caused recession was severe in some emerging economies, with very large GDP declines in Mexico, South Africa, and India but only a mild contraction in [South] Korea and moderately positive growth in Turkiye and China. The subsequent economic recovery was strong in most economies as governments increased fiscal spending, global trade recovered and private consumption rebounded following the re-opening of economic activity,” the report noted.

The 10 emerging economies are India, China, Brazil, Indonesia, South Korea, Mexico, Poland, Russia, South Africa and Turkey.

It seems as if most of these countries will see a permanent loss of output to varying degrees relative to pre-pandemic expectations despite strong recoveries, the report mentions.

Fibre2Fashion News Desk (DS)