On Wednesday, the International Monetary Fund (IMF) projected a sharp contraction of 4.5 percent for the Indian economy in 2020 citing the unprecedented coronavirus pandemic having slowed down nearly all economic activities. However, it said that the country is expected to bounce back in 2021 with a robust 6 percent growth rate.
"India's economy is projected to contract by 4.5 percent following a long period of lockdown and slower recovery than anticipated in April," the IMF said.
The latest 2020 projection for India is a massive -6.4 percent less than it's the April forecast of the IMF. The projected growth rate of 6 per cent in 2021 is -1.4 percent less than its April forecast.
The international body's record reveals that this is the lowest ever for India since 1961. The IMF does not have the data beyond that year.
In 2019, India's growth rate was 4.2 percent.
The IMF projected the global growth at -4.9 percent in 2020, 1.9 percentage points lower than the April 2020 World Economic Outlook (WEO) forecast.
"We are projecting a sharp contraction in 2020 of -4.5 percent. Given the unprecedented nature of this crisis, as is the case for almost all countries, this projected contraction is a historic low," said Gita Gopinath, IMF's Chief Economist to PTI as she released the World Economic Outlook Update.
"The COVID-19 pandemic pushed economies into a Great Lockdown, which helped contain the virus and save lives, but also triggered the worst recession since the Great Depression," Gopinath said.
In a blog post, she said that this global crisis like no other will have a recovery like no other.
The COVID-19 pandemic has had a more negative impact on activity in the first half of 2020 than anticipated, and the recovery is projected to be more gradual than previously forecast. In 2021, global growth is projected at 5.4 percent, the report said.
For the first time, all regions are projected to experience negative growth in 2020.
In China, where the recovery is underway, growth is projected at 1.0 percent in 2020, supported in part by policy stimulus.