NEW DELHI: The Organisation for Economic Co-operation and Development (OECD) on Tuesday projected that the Indian economy will bounce back to grow at 12.6% in FY22, the highest among G20 countries, aided by additional fiscal support after the covid-19 pandemic pushed the economy into recession after a gap of more than 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 it was prior to the pandemic, with marked variation in the pace of recovery across economies," the grouping of developed economies said in its interim economic outlook.

“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," it said.

OECD increased India’s growth estimate for FY22 by 4.7 percentage points from 7.9% projected in December. For FY21, it expected the economy to contract 7.4% against 8% estimated by the government statistics office.

Separately, rating agency Crisil Ltd projected the Indian economy to grow at 11% in FY22 driven by the flattening of the covid-19 affliction curve, rollout of the vaccination programme, people learning to live with the new normal, and investment-focused government spending.

However, the rating agency said as in this fiscal, the pace of growth will differ in the first and second halves of FY22. “While the first half of the next fiscal will benefit optically because of the low-base effect, the second half would see a more broad-based pick-up in economic activity because of a commodity price lift, large-scale vaccinations and likely stronger global growth," it said.