India’s growth projected at 4.5% for FY 21 says RBI

RBI presented its report on FY 20-21 on Tuesday reflecting India’s economic growth through statements mentioned below categorically explains the report.

RBI said, “India’s growth is projected at (-) 4.5% for 2020-21; global growth is projected at (-) 6.0% in single hit scenario and (-) 7.6% in the double hit scenario.”

“In its latest update (June 2020), the IMF has projected global growth at (-) 4.9 percent for 2020, with a steeply negative impact on economic activity in H1 and more gradual recovery than expected earlier. India’s growth is projected at (-) 4.5 percent for 2020-21. The projections set out by the OECD on June 10, 2020, present two scenarios – single hit and double hit – the latter being one in which the second wave of rapid contagion erupts later in 2020,” said RBI report said.

International Monetary Fund Report on Indian Economy

Indian Economy
Credits : economictimes.com

International Monetary Fund (IMF) projected a sharp decrement of 4.5 percent in the Indian Economy 2020. During such unprecedented times when the world is fighting Coronavirus Pandemic, IMF cited “historic low” in the Indian Economy. Monetary optimistically stated that the country is expected to rise and will attain a growth of 6%.

Asia’s one of the superpower observed 4.9% global growth as been projected by IMF in 2020. There seems to have a  reasonable growth and fall of 1.9% points below the April 2020 World Economic Outlook (WEO) forecast.

IMF’s Chief Economist Gita Gopinath while releasing the updates of World Economic Outlook said PTI, “We are projecting a sharp contraction in 2020 of -4.5 per cent. Given the unprecedented nature of this crisis, as is the case for almost all countries, this projected contraction is a historic low.”

The COVID19 has been catastrophic and has had an unimaginable cease to recovery, regressively impacting the economic activities, business, health, and much more. The first half of 2020 has observed major anticipation in the reports. In 2021, global growth is projected at 5.4 per cent, the report said.

In China, where the recovery from the sharp contraction in the first quarter is underway, growth is projected at 1.0 per cent in 2020, supported in part by policy stimulus. “India’s economy is projected to contract by 4.5 per cent following a long period of lockdown and slower recovery than anticipated in April, the IMF said.

Also Read: Rajeshwar Rao, Lily Vadera front runners for Reserve Bank of India Deputy Governor post

IMF demonstrated it’s concern regarding India’s lowest track record of the economy since 1961. There is a huge expectation despite the regressive database provided by IMF. No doubt in the fact that Coronavirus Pandemic has paralyzed the Economy, unleashed the recession and has increased uncertainties.

India observed growth at 6.8 per cent in the fiscal year 2018. This forecast is expected to recover slightly and mark a 5.5 per cent growth rate in 2021. The projected growth Outlook for South Asia falls sharply in 2020.

South Asian leaders tried their best since the beginning of 2020 from controlling human and resource passages to strengthening laws that took a toll on fiscal growth.

According to a study, China and India are the two major economies of the world which are expected to rise and show positive response despite slow growth rates.

The Pandemic is also likely to pull 34.3 million people on the miserable roads of poverty this year with a 56% increase that can be seen in African countries. 130 million people are expected to join the list of countries below the extreme poverty line and hunger.

People who are drastically affected by the situation are low wages, low-skilled workers this will increase income inequality in the world to be precise.

“The pace and strength of the recovery from the crisis not only hinges on the efficacy of public health measures in slowing the spread of the virus but also on the ability of countries to protect jobs and incomes, particularly of the most vulnerable members of our societies,” UN Chief Economist and Assistant Secretary-General for Economic Development Elliott Harris said.

The basis on all the baseline scenario ongoing lockdown measures are expected to lower the number of cases at the end of the second quarter. Most countries including developed and developing ones have started reopening their economies after an initial period of four to eight months.

With the expectations of 4.1 GDP growth from 3.2% growth, IMF reports said, “In this scenario, global economic activities will pick up steam from the third quarter onwards, with fiscal and monetary stimulus successfully resuscitating demand. Higher levels of unemployment and negative balance sheet effects will, however, limit the strength of the recovery.”

Also Read: Indian economy to contract by 4% in 2020-21, forecasts ADB