World Bank reduced India’s GDP prediction for FY22 to 8.3%

The World Bank cut its 2021-22 GDP growth prediction for India to 8.3 percent from 10.1 percent in April, citing the disastrous second wave of coronavirus infections as a barrier to economic recovery. It forecasted 7.5% GDP growth in fiscal 2022-23.

In its latest edition of Global Economic Prospects, the Washington-based global lender said a large second Covid-19 wave in India is weakening the sharper-than-expected rebound in activity witnessed during the second half of fiscal year 2020-21, particularly in services.

“India’s recovery is being hampered by the largest outbreak of any country since the beginning of the pandemic,” the World Bank said.

The expected rise compared to the worst-ever decrease of 7.3% in the fiscal year ended March 31, 2021 (FY21) and a 4% increase in 2019-20.

The World Bank forecasted 10.1 percent growth in Indian GDP for FY22 in April of this year. This was more than the 5.4 percent forecast in January. However, the forecasts have been reduced.

According to the global financing agency, India’s GDP is expected to expand by 6.5 percent in 2023-24. According to the Bank’s estimate, the global economy would grow by 5.6 percent in 2021, the fastest pace since the 1980s.

Policy assistance, such as increased investment on infrastructure, rural development, and health, as well as a stronger-than-expected rebound in services and manufacturing, will assist activity, according to the report.

According to the research, the FY22 prediction accounts for predicted economic impact from a massive second Covid-19 wave as well as localised mobility limitations beginning in March 2021. It is predicted that activity would follow the same, though less apparent, collapse and recovery pattern witnessed during the first wave.

NEWS SOURCE

ALSO READ: ITC margins expected to improve, stock could rise by 20%