The 5.8 percentage point reduction is the largest of the world’s major economies.
India’s economic growth forecast was further cut by the International Monetary Fund (IMF) today, and the country now faces the largest contraction of any major emerging market in the wake of the coronavirus pandemic.
Gross domestic product (GDP) will contract 10.3% in the fiscal year through March 2021, the Washington-based lender said in its World Economic Outlook, far worse than the 4.5% decline forecast in June. The reduction of 5.8 percentage points was the largest in the world’s major economies.
In the emerging economies group, “revisions to the forecast are particularly important for India, where GDP contracted much more severely than expected in the second quarter,” the IMF said in its report.
India’s lockdown at the end of March was the largest in the world, causing the economy to contract 23.9% in the June quarter from a year earlier, as businesses and jobs were devastated . Authorities have failed to control the pandemic since then, with a number of coronavirus cases exceeding 7 million, second only to the United States.
The International Monetary Fund report in its World Economic Outlook
In China, where the virus outbreak originated but is now under control, the recovery is strengthening, with the IMF forecasting 1.9% growth this year, up from 1% forecast in June. “China’s return to growth, which was stronger than expected,” helped underpin an improvement in the IMF’s global outlook, the fund said.
For emerging and developing economies excluding China, the outlook remains weak, the IMF said.
“All emerging market and developing economy regions are expected to contract this year, notably including emerging Asia, where large economies such as India and Indonesia continue to try to control the pandemic,” he said.
The IMF’s outlook for India is worse than the RBI’s prediction of a 9.5% drop in GDP in the current fiscal year. Finance Minister Nirmala Sitharaman on Monday unveiled a set of measures to boost consumer spending after a previous package totaling 21 trillion rupees ($ 286 billion) failed to deliver an immediate boost. on demand.
(Except for the headline, this story has not been edited by NDTV staff and is posted from a syndicated feed.)
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