World Bank's prediction: India's GDP to shrink 9.6% in FY21. Know everything!
By Priti Kumari
WASHINGTON: In the era of COVID-19, when we're quite accustomed to the news of 'economic vulnerability', the World Bank has amended its June forecast for India's GDP growth contraction from 3.2% to 9.6% for FY21. The World Bank in its 'South Asia Economic Focus' report downgraded South Asia's economic growth by 7.7% in 2020.
The repercussion of the lockdown imposed due to the COVID-19 outbreak badly affected the World economy. Now the report downgrading any Countries' economic growth has become a 'new normal'.In the same way, the World Bank on Thursday released a report estimating South Asia's economic growth in FY21.
In a bid to highlight the reason behind India's economic slump, the Bank's Chief Economist for South Asia Hans Timmer stated, "The informal sector has no coverage in social insurance. The informal workers in the middle of the income distribution have lost their jobs. There are no systems in place to support those people” Commenting on this, he acclaimed India's situation to be exceptional which needs a very dire outlook. Mr Timmer further asserted that the combined deficit of India is contained within 4.5-5% of GDP, the general government fiscal deficit is projected to increase by more than 12% in FY21. Due to the gradual pace of economic recovery, the source reckons India's Public debt to be around 94%.
However, the Bank expects India's financial growth to boomerang to 5.4% in FY22. Appreciating the Indian government's endeavours to combat any difficulty within limited resources and limited fiscal is very 'impressive', Mr Timmer said.