Home / News / India /  APAC staring at K-shaped economic recovery: UN body

The Asia-Pacific region including India is staring at a ‘K-shaped’ recovery of their economies with the covid-19 pandemic exposing chronic development fault lines, and vulnerable groups getting further marginalized in the post-pandemic period, a United Nations (UN) report said.

In a report titled Economic and Social Survey of Asia and the Pacific 2021: Towards post-covid 19 resilient economies, the Economic and Social Commission for Asia and the Pacific (ESCAP) on Tuesday said that multiple factors may prolong the pandemic-induced threats across and within countries.

According to the report, the uneven rollout of vaccines, the pandemic’s disproportionate impact on the poor and vulnerable groups, and developing countries’ limited fiscal response may prolong the threat posed to all by the pandemic. In a K-shaped recovery, different sectors and economic groups of an economy recover at different speeds, with the most vulnerable sections severely impacted, taking longer to come out from the jolt of the pandemic-induced recession.

“The poor and vulnerable groups were disproportionately affected, resulting in a surge in poverty and a widening of inequality gaps. ESCAP estimates that an additional 89 million people in the region could have been pushed back into extreme poverty at the $1.90 per day threshold, erasing years of progress in poverty reduction," the report said.

ESCAP has projected the Indian economy to grow at 7% in 2021 against a contraction of 7.7% in the preceding year.

“Despite a robust reduction in new covid-19 cases and the start of vaccine rollout, India’s 2021 economic output is expected to remain below the 2019 level. Meanwhile, maintaining low borrowing costs while keeping non-performing loans in check would be a challenge," the report added.

According to the report, India entered the pandemic with subdued gross domestic product (GDP) growth and investment.

“Following one of the most stringent lockdowns in the world, the economic disruptions that the country experienced mounted in the second quarter of 2020. A subsequent change in lockdown policies and success in reducing infection rates supported an impressive economic turnaround in the third quarter. However, the pace of recovery moderated in the fourth quarter with estimated year-on-year growth still close to zero," it said.

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