IMF projects India’s economy to contract by 4.5 percent this fiscal
New Delhi: The International Monetary Fund (IMF) on Wednesday lowered its growth forecast for the Indian economy in 2020 by 4.5 per cent, a “historic low”, citing economic slowdown due the two-month-long Covid-19-induced lockdown.
“India’s economy is projected to contract by 4.5 per cent following a longer period of lockdown and slower recovery than anticipated in April,” the IMF said, in an update to the World Economic Outlook it released in April.
The fund, however, also said that India is expected to bounce back in 2021 with a 6 per cent growth rate.
In 2019, India’s growth rate was 4.2 per cent. The IMF’s latest projection is -6.4 per cent less than its April forecast, where it had projected a GDP growth rate of 1.9 per cent for the country in 2020. The projected growth rate of 6 per cent in 2021 is -1.4 per cent less than its April forecast.
On global front, the IMF has projected growth at 4.9 per cent in 2020, significantly worse than the 3% drop it had estimated in its previous report in April. It would be the worst annual contraction since immediately after World War II, IMF said.
“We are projecting a sharp contraction in 2020 of – 4.5 per cent. Given the unprecedented nature of this crisis, as is the case for almost all countries, this projected contraction is a historic low,” PTI quoted IMF’s Chief Economist Gita Gopinath as saying.
“The Covid-19 pandemic pushed economies into a Great Lockdown, which helped contain the virus and save lives, but also triggered the worst recession since the Great Depression,” she added.
