GS Paper - 3 (Economy)

India’s real gross domestic product (GDP) could grow 5.5% in FY23, lower than 8.1% in 2021-22, the Organization for Economic Cooperation and Development (OECD) said. In its Economic Outlook for Southeast Asia, China and India, the agency said that China’s economy is seen growing 5.1% in both FY22 and FY23.

What

  1. Driven by infrastructure spending and border reopenings, the GDP of emerging Asia - China, India and the 10 members of the Association of Southeast Asian Nations (ASEAN)- is projected to grow 5.8% this year, following a 7.4% expansion in 2021 and a 0.8% contraction in 2020.
  2. The Ukraine war adds to inflation and supply chain risks facing an emerging Asia attempting to break out of the Covid-19 slump.
  3. Inflation, notably rising energy and food prices, and supply-chain disruptions present an ongoing risk to the recovery, OECD said.
  4. Governments in the region need to implement effective macroeconomic and structural policies to safeguard their economies, continue to improve citizen’s well-being and accelerate progress to achieve the Sustainable Development Goals.
  5. One of the main obstacles to bond-market development in India is limited investor base; insufficient liquidity in the secondary market, OECD noted.