How will the Indian economy be this year, World Bank told
The World Bank said on Tuesday that the Indian economy is expected to decline by 9.6 percent in the financial year 2020-21. This reflects a decrease in household spending and private investment. The Indian economy is projected to grow at 5.4 percent in the next financial year 2021-22.
The World Bank has stated in the Global Economic Prospects report that the income of those working in the unorganized sector has been badly affected by the Covid-19 pandemic. 80 percent people are employed in this sector. It states, “An epidemic in India affected the economy at a time when it was already declining. Production is projected to decline by 9.6 percent in FY 2020-21. This explains the sharp decrease in family income and private investment.”
5.4% growth in 2021-22
The World Bank said, “India’s economic growth rate will improve in 2021-22 and is projected to be 5.4 percent. Given the weaknesses in the financial sector, comparatively faster growth will affect less investment from the private sector.” According to the report, the unorganized sector accounts for 80 percent of the total employment. There was a considerable loss of income during the epidemic. Recent consumption figures, such as PMI (Purchasing Manager Index) GST collections, indicate a revival in the services and manufacturing sectors.
The condition of neighboring Pakistan
Regarding Pakistan, the World Bank said that their revival will be mild and the growth rate is expected to be 0.5 percent in 2020-21. Given the pressure on continued fiscal consolidation and weaknesses in the services sector, growth is expected to be impacted. In other countries of South Asia, the effects of Covid-19 have been relatively small, but they have been affected even after that. Economies that were largely dependent on tourism and travel have been adversely affected. It includes Maldives, Nepal and Sri Lanka.
According to the report, the growth rate in South Asia is estimated at 3.3 percent. The World Bank has forecast a four percent growth in the global economy in 2021. This estimate, given the approval of the Covid-19 vaccine in many countries of the world, is lower than the trend of 5 percent growth before the epidemic. At the same time, the report estimates 3.8 percent growth in the global economy in 2022. Accordingly, the world economy is projected to decline by 4.3 percent in 2020.
