India’s Economy Projected To Decline By 4.5% This Year!

New Delhi  : The International Monetary Fund (IMF) on Wednesday said Indian economy will contract 4.5% in FY21, reversing its rather optimistic forecast in April of 1.9% growth for the same year, citing the larger-than anticipated disruption to domestic activity in Asia’s third largest economy due to a more severe nationwide lockdown.

“India’s economy is projected to contract by 4.5% following a longer period of lockdown and slower recovery than anticipated in April,” the multilateral lending institution said in its World Economic Outlook (WEO) Update. Growth revival is now tempered to 6% in FY22 from 7.4% estimated in April.

After IMF released its WEO in April, the pandemic rapidly intensified in many countries including India, necessitating stringent lockdown measures for a prolonged period, thus resulting in even larger disruptions to activity and massive job losses than forecast. India has lifted almost all mobility and business restrictions to nurture the economy back to normalcy.