Mumbai, June 24: International Monetary Fund (IMF) on Wednesday suggested a sharp contraction of 4.5 percent for the Indian Market in 2020 and said it’d be a historic low.
IMF explained the contraction in economy would be due to unprecedented coronavirus pandemic that has stalled all financial activities in the world over. However, IMF expressed hope that the nation is expected back using a increase of 6 per cent in 2121.
The IMF has projected the worldwide growth rate at -4.9 per cent in 2020, 1.9 per cent points below the April 2020 World Economic Outlook (WEO) prediction.
“We’re projecting a sharp contraction in 2020 of -4.5 percent. Given the unprecedented nature of the catastrophe, as is the case for virtually all nations, this projected contraction is a historical low,” said Indian-American Gita Gopinath, IMF’s Chief Economist. She released the World Economic Outlook on Wednesday.
The Covid-19 pandemic has had a negative impact on activity in the first half of 2020 than expected, and the restoration is expected to be slow than previously predicted. In 2021, international growth is estimated at 5.4 per cent, the IMF report said.
For the first time, all areas are projected to experience negative growth in 2020. In China, in which the recovery from a sharp contraction in the first quarter is underway, growth is projected at 1 per cent in 2020.
“India’s economy is projected to contract with 4.5 per cent after a longer period of lockdown and slower recovery than anticipated in April,” the IMF said.
In accordance with IMF, its recordings show that this is the smallest ever for India since 1961. The IMF does not have information. On the flip side, IMF said, the Economy is expected to dip back with a strong six per cent increase in 2021.
In 2019, India’s growth rate was 4.2 percent. The latest 2020 projection for India is a huge -6.4 percent less than the April forecast of IMF. The estimated growth rate of 6 per cent in 2021 is -1.4 percent less than IMF’s April forecast.
Also read: India is one of the fastest growing economies in the world according to IMF.
