The World Bank on Tuesday, 8 June, projected India's economy to grow at 8.3 percent in 2021 and 7.5 percent in 2022. This comes amid India’s recovery being hit by the second wave of the COVID-19 pandemic.
According to PTI, the World Bank, in its latest issue of Global Economic Prospects, noted that in India, the second COVID-19 wave is undermining the “sharper-than-expected” rebound in activity, especially in services, which was seen during the second half of Fiscal Year 2020/21.
“For India, GDP in fiscal year 2021/22 starting from April 2021 is expected to expand 8.3 percent.”World Bank
The Bank also stated that the global economy is set to expand by 5.6 percent in 2021 – its strongest post-recession pace in 80 years.
“India’s recovery is being hampered by the largest outbreak of any country since the beginning of the pandemic.”The World Bank
The World Bank further pointed out:
- In 2019, India registered a growth rate of four percent
- In 2020, India's economy is estimated to have contracted by 7.3 percent
- In 2023, India is expected to grow at 6.5 percent.
This forecast has been revised up by 2.9 percentage points. However, it still marks significant expected economic damage from the second wave of COVID-19 and localised mobility restrictions since March 2021, the report said.
Activity is expected to follow the same – yet less pronounced – collapse and recovery seen during the first wave, the report further pointed out.
“The pandemic will undermine consumption and investment as confidence remains depressed and balance sheets damaged. Growth in FY 2022/23 is expected to slow to 7.5 percent, reflecting lingering impacts of COVID-19 on household, corporate and bank balance sheets; possibly low levels of consumer confidence; and heightened uncertainty on job and income prospects.”World Bank
Further, as per the World Bank, in India, the FY 2021/22 budget marked a significant shift in policy.
On 31 March, the World Bank had said India’s economy has bounced back amazingly from the COVID-19 pandemic and nationwide lockdown over the last one year. However, it had also pointed that, the economy was not out of the woods yet.
(With inputs from PTI.)