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Indian economy: IMF projects 10.3% contraction

The country is likely to bounce back with an 8.8% growth rate in 2021, thus regaining the position of the fastest growing economy
Released ahead of the annual meetings of the IMF and the World Bank, the report said global growth would contract 4.4 per cent this year and bounce back to 5.2 per cent in 2021.

PTI   |   Washington   |   Published 14.10.20, 01:07 AM

The Indian economy, severely hit by the coronavirus pandemic, is projected to contract by a massive 10.3 per cent this year, the International Monetary Fund said on Tuesday.

However, India is likely to bounce back with an impressive 8.8 per cent growth rate in 2021, thus regaining the position of the fastest growing emerging economy, surpassing China’s projected growth rate of 8.2 per cent, the IMF said in its latest ‘World Economic Outlook’ report.

Released ahead of the annual meetings of the IMF and the World Bank, the report said global growth would contract 4.4 per cent this year and bounce back to 5.2 per cent in 2021.

America’s economy is projected to contract by 5.8 per cent in 2020 and grow by 3.9 per cent the next year, the IMF said.

China is the only country, among the major economies, to show a growth rate of 1.9 per cent in 2020, it said.

The IMF in its report said that revisions to the forecast are particularly large for India, where gross domestic product (GDP) contracted much more severely than expected in the second quarter.

“As a result, the economy is projected to contract by 10.3 per cent in 2020, before rebounding by 8.8 per cent in 2021,” it said.

In June, the IMF had projected 4.9 per cent contraction in the economy.

According to the IMF, India is among those likely to suffer the greatest damage from global warming, reflecting its initially high temperatures. For India, the net gains from climate change mitigation-relative to inaction-would be up to 60-80 per cent of GDP by 2100.

While estimates of losses from climate change are somewhat smaller for colder regions (for example, Europe, North America, and east Asia), these are likely underestimations as they do not include a number of damages (for example, rise in sea levels, natural disasters, damage to infrastructure from thawing of permafrost in Russia) and negative global spillovers from large economic disruptions in other parts of the world.  

Last week, the World Bank said India’s GDP this fiscal is expected to contract by 9.6 per cent.

“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 last week.

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

The Indian economy, severely hit by the coronavirus pandemic, is projected to contract by a massive 10.3 per cent this year, the International Monetary Fund said on Tuesday.

However, India is likely to bounce back with an impressive 8.8 per cent growth rate in 2021, thus regaining the position of the fastest growing emerging economy, surpassing China’s projected growth rate of 8.2 per cent, the IMF said in its latest ‘World Economic Outlook’ report.

Released ahead of the annual meetings of the IMF and the World Bank, the report said global growth would contract 4.4 per cent this year and bounce back to 5.2 per cent in 2021.

America’s economy is projected to contract by 5.8 per cent in 2020 and grow by 3.9 per cent the next year, the IMF said.

China is the only country, among the major economies, to show a growth rate of 1.9 per cent in 2020, it said.

The IMF in its report said that revisions to the forecast are particularly large for India, where gross domestic product (GDP) contracted much more severely than expected in the second quarter.

“As a result, the economy is projected to contract by 10.3 per cent in 2020, before rebounding by 8.8 per cent in 2021,” it said.

In June, the IMF had projected 4.9 per cent contraction in the economy.

According to the IMF, India is among those likely to suffer the greatest damage from global warming, reflecting its initially high temperatures. For India, the net gains from climate change mitigation-relative to inaction-would be up to 60-80 per cent of GDP by 2100.

While estimates of losses from climate change are somewhat smaller for colder regions (for example, Europe, North America, and east Asia), these are likely underestimations as they do not include a number of damages (for example, rise in sea levels, natural disasters, damage to infrastructure from thawing of permafrost in Russia) and negative global spillovers from large economic disruptions in other parts of the world.  

Last week, the World Bank said India’s GDP this fiscal is expected to contract by 9.6 per cent.

“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 last week.

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

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