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The International Monetary Fund (IMF) has projected a deeper 4.5% contraction for India in FY21 than earlier estimated, citing a longer lockdown period and slower than anticipated recovery.
In the June update – A Crisis Like No Other, An Uncertain Recovery – of its flagship World Economic Outlook (WEO), the IMF has forecast a –4.9% global growth in 2020, 1.9 percentage points below the April 2020 estimate.
The IMF had forecast a 1.9% growth for India . in the April edition of the WEO and 3% contraction for the world.
“The Covid-19 pandemic has had a more negative impact on activity in the first half of 2020 than anticipated, and the recovery is projected to be more gradual than previously forecast,” the IMF said, adding there were significant downside risks and there was a higher-than-usual degree of uncertainty around its forecast.
“India’s economy is projected to contract by 4.5% following a longer period of lockdown and slower recovery than anticipated in April,” the fund said.
The latest assessment has also toned down the bounce back in FY22 to 6% against a stronger 7.4% growth forecast in April. In 2021, global growth is projected at 5.4%, marginally lower than 5.8% it expected in April.
Source: The Economic Times