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The World Bank today predicted that India’s GDP is expected to contract by 9.6 per cent this fiscal which is reflective of the national lockdown and the income shock experienced by households and firms due to the COVID-19 pandemic, noting that the country’s economic situation is much worse than ever seen before.

In its latest South Asia Economic Focus report ahead of the annual meeting of the World bank and International Monetary Fund, World Bank forecasts a sharper than expected economic slump across the region, with regional growth expected to contract by 7.7 per cent in 2020, after topping six per cent annually in the past five years.

India’s GDP is expected to contract by 9.6 per cent in the fiscal year that started in March, the World Bank said in the report released here.

Regional growth is projected to rebound to 4.5 per cent in 2021, it said.

Factoring in population growth, however, income-per-capita in the region will remain 6 per cent below 2019 estimates, indicating that the expected rebound will not offset the lasting economic damage caused by the pandemic, it said.

The situation is much worse in India than we have ever seen before, Hans Timmer, World Bank Chief Economist for South Asia told reporters during a conference call.

It is an exceptional situation in India. A very dire outlook, he said.

There was a 25 per cent decline in GDP in the second quarter of the year, which is the first quarter of the current fiscal year in India.

In the report, the World bank said that the spread of the coronavirus and containment measures have severely disrupted supply and demand conditions in India.

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https://www.worldbank.org/en/about/annual-report?cid=ECR_TT_worldbank_EN_EXT#anchor-annual

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