indias-economy-to-contract-by-103-this-fiscal-says-imf

Context:

  • India’s economy is expected to contract 10.3% in the current fiscal year as the country and the world reel from the COVID-19 pandemic, according to the International Monetary Fund (IMF).
  • Global output is projected to shrink 4.4% in 2020, the IMF said in its World Economic Outlook October 2020 report titled, “A Long and Difficult Ascent”.
  • The projection for India is a downgrade of 5.8 percentage points from its June forecast. India is expected to rebound in the fiscal year beginning in April 2021 with 8.8% growth — an upgrade of 2.8 percentage points relative to the June update.
  • “Revisions to the forecast are particularly large for India, where GDP contracted much more severely than expected in the second quarter,” the IMF said.
  • Consumer prices in India are expected to grow at 4.9% this year and by 3.7% in the next fiscal. The current account balance is projected to grow by 0.3% this year and -0.9% next year.
  • For the world as a whole, the 2020 growth projection has been revised upwards by 0.8 percentage points relative to June — the result of a less dire second quarter and signs of a stronger recovery in the third quarter, partly offset by downgrades in certain developing countries and emerging economies (except China). The recovery in 2021 is projected to be at 5.2%, lower than the June 2020 projections.