InvestorQ : Why has the World Bank projected negative growth for India in FY21?
diksha shah made post

Why has the World Bank projected negative growth for India in FY21?

Answer
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3 months ago


The slowdown was never in doubt after the COVID-19 badly impacted global growth. World Bank has painted a fairly grim picture of the world economy and the Indian economy is no exception. Indian GDP is estimated to contract 3.2% in fiscal year 2021 as the lag effect of the COVID-19 lockdown will ensure growth takes longer to manifest. World Bank does project the Indian economy to bounce back in FY22. However, the developed world is likely to contract by 7% as against just 2.5% contraction in the emerging markets. As a result, the World Bank has projected global GDP to contract by 5.2% in calendar 2020. This will be partly due to the lockdown resulting in lower production, weaker global trade metrics as well as long term disruptions in the supply chain. From a wealth effect point of view, what is disconcerting is that the fall in global per capita GDP will be the worst since the Second World War. In addition, World Bank has also warned that any further shocks would entail the global growth performing worse than the current estimates.