“It will remain crucial to encourage private investment to support inclusive growth beyond the recovery,” it advised. “Inflation is expected to decelerate throughout 2022, continuing a trend observed since the second half of 2021 when relatively restrained food prices compensated for higher oil prices,” the report said while attaching a note of caution: “A sudden and renewed rise in food inflation, however, due to unpredictable weather, broader supply disruptions and higher agricultural prices, could undermine food security, reduce real incomes and increase hunger across the South Asia) region.” The report estimated India’s consumer price inflation at 5.9 per cent last year and projected it to go down to 5.6 percent this year and 5.3 percent next year. The WESP said that it expected the Reserve Bank to raise interest rates throughout this year.

In its snapshot of the world economy, the report said: “The global economic recovery is facing significant headwinds amid new waves of Covid-19 infections, persistent labor market challenges, lingering supply-chain challenges and rising inflationary pressures.”

“The momentum for growth - especially in China, the United States and the European Union - slowed considerably by the end of 2021, as the effects of monetary and fiscal stimuli began to recede and major supply-chain disruptions emerged,” according to the report.

Assessing the scenario in the report, Secretary-General Antonio Guterres said: “In this fragile and uneven period of global recovery, the World Economic Situation and Prospects 2022 calls for better targeted and coordinated policy and financial measures at the national and international levels.”

The 46 countries classified as the least developed are estimated to grow by only 1.4 per cent this year, according to the WESP. “The time is now to close the inequality gaps within and among countries. If we work in solidarity - as one human family - we can make 2022 a true year of recovery for people and economies alike,” Guterres said.

The WESP painted a mixed picture for South Asia. “Amid sound macroeconomic policies, Bangladesh has navigated the Covid-19 pandemic relatively well” and its “GDP is projected to expand by 6 per cent in 2022”, the report said. Its “economic activity rides on export growth and the rising demand for apparel, robust remittance inflows, and accommodative fiscal and monetary policies”, it added.