World Bank Predicts 3.2% Contraction For Indian Economy In FY21, Global Economy By 5%
As per the World Bank's estimates, the country is reeling under a recession and the deepening economic crisis is no longer hidden. The four quarters of last year show how the country is in the grip of a severe recession. But the situation has gone from bad to worse due to COVID-19.
The latest World Bank report estimated that India's economy will shrink by 3.2% in 2021. The same rate was in positive 4.2% last year. According to the bank, the biggest reason for this tremendous decline is due to the strict lockdown done to fight the corona pandemic that hit the businesses hard.
Also, the canceled economic activities all over the world have also been held responsible for the situation. Several other international agencies such as Fitch, S&P, Goldman Sachs and UBS have already predicted that India's economy will shrink by 5%.
The state of the economy has already been exposed due to the slow growth rate. International rating agency Moody's has put India in the negative category for investment.
However, in the same report, it is estimated that the economy will improve in the year 2022 and it can grow at a pace of 3.1%. For a perspective, another World Bank report in January had predicted India's growth rate to be 6.2% in 2022.
In the report, it's being said that the greatest impact of this economic crisis will be on a developing country like India where a large scale workforce is employed in the unorganized sector. The World Bank believes that not only India but the entire world economy has been hit due to the lockdown caused by the epidemic. In the same report, it is estimated that the global economy will shrink by 5%.