The World Bank estimated that India’s economy will contract 9.6 percent in 2020-21 fiscal. The bank made this forecast in its South Asia report unveiled today. The latest forecast is against the bank’s previous forecast of 3.2 percent contraction of India’s economy FY 2020-21 which it had said in June this year.
In the latest forecast, the World Bank said households, urban service companies and several small and middle-scale industries were largely affected due to nationwide lockdown. It said the income of the households and individuals have taken a hit. The bank’s estimation is in line with the global economists.
Economists, multilateral agencies and investment banks have also estimated that India’s economy will contract largely in this fiscal. They opined that India’s economic shrink will be between 5 percent to 15 percent in this financial year. Of the global economies, India’s GDP took severe beating as its GDP contracted a staggering 23.4 percent in the June quarter.
Meanwhile, the World Bank in its forecast said growth in India may return to 5.4 percent in Financial Year 2022 provided Covid-19 pandemic is over and Covid-related restrictions are totally lifted by 2022.