The Organisation for Economic Co-operation and Development (OECD), cut its gross domestic growth forecast for India for the current financial year (FY23) to 6.6 per cent from 6.9 per cent, citing higher medium-term global uncertainty and slowing domestic economic activity.
What The Report Pointed:
“Economic growth has lost momentum over the summer, due to a combination of erratic rainfall, which impacted sowing activities, and falling purchasing power. Concerns over demand conditions are considerable in services and infrastructure sectors, while consumers have become cautious regarding non-essential spending due to higher prices for food and energy,” the agency said in its latest economic outlook report.
The agency said that tighter financial market conditions were weighing on the demand for capital goods, while the monthly energy and food import bill kept rising and the current account deficit widened in the July-September quarter to 2.9 per cent of GDP.
About The Inflation:
Headline inflation remains above 6 per cent mostly due to the trend increase in the price of food. Unemployment estimates suggest improving labour market conditions in both urban and rural areas, but there are few signs of a wage-inflation spiral,” it said.
Still A Better Performer:
The agency said that India is set to be the second-fastest growing economy in the G-20 in FY23, despite decelerating global demand and the tightening of monetary policy to manage inflationary pressures.
What has been Projected:
“GDP growth will slow to 5.7 per cent in FY24, as exports and domestic demand growth moderate. Inflation will crimp private consumption but moderate at the end of the projection period,” it projected.
About The World Economy:
The world economy is paying a high price for Russia’s unprovoked, unjustifiable and illegal war of aggression against Ukraine. With the impacts of the COVID-19 pandemic still lingering, the war is dragging down growth and putting additional upward pressure on prices, above all for food and energy. Global GDP stagnated in the second quarter of 2022 and output declined in the G20 economies. High inflation is persisting for longer than expected. In many economies, inflation in the first half of 2022 was at its highest since the 1980s. With recent indicators taking a turn for the worse, the global economic outlook has darkened.
About Organisation for Economic Cooperation and Development (OECD):
The Organisation for Economic Cooperation and Development (OECD) is an intergovernmental economic organization with 38 member countries that was established in 1961 to promote economic development and global trade. In 2017, the OECD member states accounted for 62.2 percent of global nominal GDP (US$49.6 trillion) and 42.8 percent of global GDP (International $ 54.2 trillion) at purchasing power parity.
The OECD’s headquarters are located in Paris, France, in the Château de la Muette.
- As of now, there are 38 members
- Colombia and Costa Rica were the most recent countries to join the OECD in April 2020 and May 2021, respectively.
- The Council voted on January 25, 2022, to start the first step in membership talks with six OECD candidate countries: Argentina, Brazil, Bulgaria, Croatia, Peru, and Romania.
- Member countries, Substantive Committees, the OECD Secretariat make up the OECD.
- The Secretary-General leads the OECD Secretariat, which provides support to the Standing and Substantive Committees. It’s broken down into Directorates.
- Australia, Austria, Belgium, Canada, Chile, Colombia, Costa Rica, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, South Korea, Latvia, Lithuania, Luxembourg, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, United Kingdom, and the United States are among the 38 member countries.