Indian Economy anticipated to shrink by 9.6% in Financial Year 2021- World Bank
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In an assumption by the World Bank, Indian economy is expected to shrink by 9.6% in the fiscal year of 2020-2021.
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- The fall of 9.6 % is expected to affect the household expenses and private investment and the growth is expected to recover to 5.4 per cent in 2021.
- The informal sector of the economy has faced severe losses due to COVID pandemic.
- However, recent data has indicated gradual recovery of services and manufacturing sector.
- Regional economic activity growth was also surrounded somewhere around 6.7 per cent in 2020 where Indian economy was already at a fall due to Non-Bank financial corporations. Pandemic added more adverse effect to the downfall of the economy.
- Pakistan’s growth is at 0.5% in the fiscal year of 2020-2021 due to increased government expenditure in various sectors and the weak service sector.
- Economies that are based on travel and tourism were hit hard during pandemic time.
- Bangladesh’s growth is expected to slow down to 2 per cent in the fiscal year of 2019-2020 whereas the growth of Pakistan is expected to be around 1.5 % in the fiscal year of 2019-2020.
- The growth of South Asia is projected to be 3.3% in 2021.
Such weak growth prospects also suggest slow recovery in areas of employment and income, more prominently in the service sector.Fiscal policy and other avenues of credit provisioning will also show a slow and hampered support for recovery. Once an effective COVID vaccine arrives and the pandemic is overcome the growth trajectory will again move in the positive direction, it is hoped.
