The International Monetary Fund (IMF) on Tuesday lowered its economic growth forecast for India to 9.5 per cent for the fiscal year March 31, 2022, as the start of a severe second COVID-19 wave cut into the recovery pace. This forecast for 2021-22 is lower than the 12.5 per cent GDP growth that the IMF had forecast before the second wave hit in April.
For 2022-23, the IMF expects economic growth of 8.5 percent, up from 6.9 percent projected in April. The IMF in its latest World Economic Outlook (WEO) said, “Growth prospects in India have eroded after a severe second COVID wave during March-May and a slow recovery in confidence from that shock is expected.” Is.”
India’s economy is slowly recovering from a deep contraction and subsequent second severe wave of COVID-19 in the financial year ended March 31, 2021 (7.3 per cent). The IMF has joined several global and domestic agencies that have cut India’s growth forecast for the current fiscal. Last month, S&P Global Ratings had forecast GDP growth at 9.5 per cent in the current fiscal and 7.8 per cent in 2022-23.
While the World Bank sees GDP growth at 8.3 per cent from April 2021 to March 2022, the Asian Development Bank (ADB) last week lowered India’s economic growth forecast to 10 per cent from 11 per cent projected in April. Another US-based rating agency Moody’s has forecast a growth of 9.3 per cent in India in the current fiscal ending March 2022. For the 2021 calendar year, Moody’s sharply cut its growth forecast to 9.6 percent.
The GDP, which declined from USD 2.87 trillion in 2019-20 to USD 2.66 trillion the next year, is projected to reach around USD 4 trillion in 2024-25. Overall, the global economy is projected to grow by 6 percent in 2021 and 4.9 percent in 2022. The 2021 global growth forecast is unchanged from the April 2021 WEO, but with offset revisions, the report said.
“Global economic recovery continues, but with a widening gap between advanced economies and many emerging market and developing economies. Our latest global growth forecast for 2021 is unchanged from the previous outlook, but the structure has changed,” said IMF chief economist Gita Gopinath said in a blog post issued with WEO.
Gopinath said the IMF estimates that the pandemic has reduced per capita income in advanced economies by 2.8 per cent, relative to pre-pandemic trends in 2020-2022, compared with a per-year reduction for emerging market and developing economies. compared to an annual per capita loss of 6.3 percent (excluding China). “These revisions reflect a significant difference in the evolution of the pandemic since the delta variant has been eradicated. About 40 percent of the population has been fully vaccinated in advanced economies, compared with 11 percent in emerging market economies and low-income developing countries. There is a small fraction in countries. countries,” she wrote.
“The expected immunization rate and return to normalcy have led to an upgrade, while some countries, especially India, have declined due to lack of access to vaccines and new waves of COVID-19 cases,” Gopinath said.