Indian Economy will Shrink by 4.5% in 2020, Global Economy Expects GDP to Shrink 4.9%
- The International Monetary Fund (IMF) has projected a deeper 4.5% contraction for India in FY21 than earlier estimated, citing a longer lockdown period and slower than anticipated recovery.
- In the June update – A Crisis Like No Other, An Uncertain Recovery – of its flagship World Economic Outlook (WEO), the IMF has forecast a –4.9% global growth in 2020, 1.9 percentage points below the April 2020 estimate.
- The IMF had forecast a 1.9% growth for India in the April edition of the WEO and 3% contraction for the world.
- “The Covid-19 pandemic has had a more negative impact on activity in the first half of 2020 than anticipated, and the recovery is projected to be more gradual than previously forecast,” the IMF said, adding there were significant downside risks and there was a higher-than-usual degree of uncertainty around its forecast.
- “India’s economy is projected to contract by 4.5% following a longer period of lockdown and slower recovery than anticipated in April,” the fund said.
- The latest assessment has also toned down the bounce back in FY22 to 6% against a stronger 7.4% growth forecast in April. In 2021, global growth is projected at 5.4%, marginally lower than 5.8% it expected in April.
The International Monetary Fund (IMF) is an international organization headquartered in Washington, D.C., consisting of 189 countries working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world while periodically depending on the World Bank for its resources.
- Founded – 27 December 1945
- Headquarters – Washington D.C., US
- Managing Director (MD)- Kristalina Georgieva
- Chief Economist– Gita Gopinath
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