Organization for Economic Co-operation and Development (OECD) interim economic outlook has raised India’s gross domestic product (GDP) growth. It predicts the GDP to rebound to 12.6 percent in FY22, the fastest in the world followed by China at 7.8 percent growth. This growth will be aided by additional fiscal support after the coronavirus pandemic pushed the economy into recession after a gap of over 40 years.

"The recovery in activity continued in the fourth (December) quarter of 2020, despite new virus outbreaks in many economies and tighter containment measures. Global output remained around 1% lower than prior to the pandemic, with marked variation in the pace of recovery across economies. The rebound has been relatively fast in several large emerging-market economies.

Activity moved above pre-pandemic levels in China, India and Turkey, helped by strong fiscal and quasi-fiscal measures and a recovery in manufacturing and construction," the grouping of developed economies said in its interim economic outlook.

OECD raised India’s growth estimate from FY22 by 4.7 percent points from 7.9 projected in December. However, it expects the economy to contract 7.4 percent in FY21 against an eight percent decline estimated by the government statistics office.

OECD also expects the global GDP to grow by 5.6 percent in 2021, compared to 1.4 percent in December’s report.

"Global economic prospects have improved markedly in recent months, helped by the gradual deployment of effective vaccines, announcements of additional fiscal support in some countries, and signs that economies are coping better with measures to suppress the virus," it said in a report.

This recovery will be largely led by the US, especially due to the President Joe Biden’s $1.9 trillion stimulus program, Laurence Boone, Chief Economist of the OECD, reports AFP.

But for the moment, only China, India and Turkey have surpassed pre-pandemic levels and the picture is very mixed elsewhere.

"Despite the improved global outlook, output and incomes in many countries will remain below the level expected prior to the pandemic at the end of 2022," said the OECD, which groups the world's most developed economies.