India’s economy to contract 9.6% in FY21, muted recovery seen: World Bank
New Delhi: The World Bank expects India’s economy to contract 9.6% FY21, steeper than 3.2% shrinkage projected earlier. South Asia as a region is set to plunge into its worst ever recession with a sharper than expected contraction of 7.7%, the World Bank said in its half-yearly South Asia Focus update released on Thursday. India’s growth is projected to rebound to 5.4% in FY22, mostly reflecting base effects, assuming Covid19 -related restrictions are completely lifted by 2022. As per the bank, weak activity, domestically and abroad, is also likely to depress both Indian imports and exports.
India’s economy shrank an unprecedented 23.9% in the first quarter. “India’s economy was already slowing before the pandemic. (Though) we are impressed by the government’s response with limited resources and fiscal space…the big problem is that the informal sector has no coverage.