Indian economy to grow by 8.3% in 2021: World Bank
As per World Bank’s projection, India’s economy is expected to grow by 8.3% in 2021 and 7.5% in 2022. This is despite disruptions in recovery of the economy caused by second wave of the COVID-19 in the country. In the latest issue of Global Economic Prospects, the global lender reported the unprecedented second wave of COVID-19 is sabotaging the better than expected recovery of the Indian economy, witnessed during second half go FY 2020-21, especially for the services.
For 2020, Indian economy is estimated to contract by 7.3% while in 2019, the economy grew by 4%. Global economy is expected to grow by 5.6% in 2021, experiencing strongest post recession grow in the last 80 years. Policy support such as higher level of spending on infrastructure, health, and rural development is expected to benefit the activities. Expectation for recovery stronger than expected in manufacturing and services.
“The pandemic will undermine consumption and investment as confidence remains depressed and balance sheets damaged. Growth in FY 2022/23 is expected to slow to 7.5 per cent, reflecting lingering impacts of COVID-19 on household, corporate and bank balance sheets; possibly low levels of consumer confidence; and heightened uncertainty on job and income prospects,” it said.
The World Bank further added, “In India, fiscal policy shifted in the FY 2021/22 budget toward higher expenditure targeted at healthcare and infrastructure to boost the post-pandemic recovery. The renewed outbreak, however, may require further targeted policy support to address the health and economic costs.”