According to Fitch, India’s expected labor supply growth is also lower than in 2019, due to expected negative growth in the labor force participation rate.
Fitch Ratings has increased India’s medium-term growth rate by 0.7 percentage points (PP) to 6.2% “taking into account the improvement in employment rate and working-age population forecast” slight increase.
According to Fitch, India’s expected labor supply growth is also lower than in 2019, due to expected negative growth in the labor force participation rate. “While the activity rate has recovered from the crisis caused by the pandemic, it remains significantly lower than levels recorded in the early 2000s, in part because of women’s employment rates still very low,” he declared in the latest report on the Global Economic Outlook (GEO) of 10 emerging countries. economical (EM10)
Fitch’s forecast of unweighted average potential growth for emerging countries at 10 is unchanged from the previous assessment (published in July 2021), at 3%.
“But this hides big changes at the country level. We have cut Russia and China’s projections by 0.8pp and 0.7pp, respectively, and those of Korea and South Africa by 0.2pp,” it said.
“By contrast, we have increased Mexico and Poland’s potential growth estimates by 0.6pp and 0.4pp, respectively. We have increased India’s estimate by 0.7pp while those of Brazil, Turkiye and Indonesia are all now higher by 0.2pp,” Fitch said.
“But it also highlights the legacy of economic disruptions from the pandemic. GDP fell in all the EM10 except China and Turkiye in 2020, with very steep declines in India, Mexico and South Africa. Even after subsequent recoveries, GDP in 2022 remains generally much lower than would be implied by extrapolating pre-pandemic trends, especially in India, Indonesia and Mexico,” Fitch said. know.
Fitch Ratings forecasts EM10’s medium-term growth potential of 4.0% on a weighted average GDP basis. This is a downward revision from 4.3% in our previous assessment in July 2021, due to a 0.7 percentage point decrease in favor of China. “Our EM10 unweighted average potential growth forecast remains at 3%, unchanged from our previous assessment in July 2021,” the statement said.
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