The World Bank on Tuesday predicted India’s economy to contract by 9.6% in 2020-’21 financial year and recover to 5.4% in the next fiscal....
The World Bank on Tuesday predicted India’s economy to contract by 9.6% in 2020-’21 financial year and recover to 5.4% in the next fiscal. The bank said India’s expected contraction is due to a sharp decline in household spending and private investment as the coronavirus pandemic badly hit the informal sector that accounts for four-fifths of employment.
“In India, the pandemic hit the economy at a time when growth was already decelerating,” the World Bank said in its Global Economic Prospects report. “The output is estimated to contract by 9.6 per cent in Fiscal Year 2020/21, reflecting a sharp drop in household spending and private investment. In India, growth is expected to recover to 5.4 per cent in 2021, as the rebound from a low base is offset by muted private investment growth given financial sector weaknesses.”
The bank pointed out that non-performing loans in the financial sector were “already high” even before the coronavirus crisis. However, it added that the services and manufacturing sectors were recovering fast.
The Indian economy saw its worst contraction in decades, with the Gross Domestic Product shrinking by a record 23.9%, in the April to June quarter and reflected the severe impact of the coronavirus-induced lockdown. India’s GDP growth rate contracted by 7.5% for the second...
