India’s economy to shrink by 3.2% in FY21: World Bank

TIL Desk/Business/Washington/ India’s economy will shrink by 3.2 per cent in the current fiscal, the World Bank said on Monday as it joined a chorus of international agencies that are forecasting a contraction in growth rate due to the coronavirus lockdown halting economic activity.

The Washington-based multilateral lender said that the COVID-19 pandemic and the multi-phased lockdown imposed to curb its spread has resulted in a devastating blow to the Indian economy. In its latest edition of the Global Economic Prospect, the World Bank downgraded its projection of India by a massive negative nine per cent.

However, the Indian economy is expected to bounce back in 2021, the World Bank said. “In India, growth is estimated to have slowed to 4.2 per cent in the fiscal year 2019/20 (the year ending in March-2020) and output is projected to contract by 3.2 per cent in fiscal year 2020/21, when the impact of COVID-19 will largely materialise. “Stringent measures to restrict the spread of the virus, which heavily curtail short-term activity, will contribute to the contraction,” it said in the Global Economic Prospect report.