COVID-19 impact | IMF projects India's growth rate at 1.9% in 2020, expects rebound in next fiscal year

The International Monetary Fund (IMF) on April 14 slashed growth forecast for the Indian economy, projecting a GDP growth of 1.9 percent in 2020. This comes at a time when the global economy has hit the worst recession as a result of the collapse in economic activity due to the coronavirus-induced lockdown.

In its latest World Economic Outlook report, the IMF does project a rebound in the growth of the Indian economy in 2021, at a rate of 7.4 percent. India has been placed among the fastest-growing emerging economies of the world.

Meanwhile, in 2021, China, the United States, and Japan are projected to grow at 9.2 percent, 4.5 percent, and 3 percent respectively, the report noted.

Also Read | Coronavirus 'Great Lockdown' to shrink global economy by 3% in 2020: IMF

IMF Chief Economist Gita Gopinath said, "We project global growth in 2020 to fall to -3 percent. This is a downgrade of 6.3 percentage points from January 2020, a major revision over a very short period."

She added that the current situation is a crisis like no other, and there is substantial uncertainty about its impact on people's lives and livelihoods, Gopinath said.

According to the World Economic Outlook report, the rebound in 2021 depends critically on the pandemic fading in the second half of 2020, allowing containment efforts to be gradually scaled back and restoring consumer and investor confidence.

Following the announcement of the extension of the nationwide lockdown until May 3, rating agency ICRA also projected a contraction in the range of 10 percent to 15 percent in India's gross domestic product (GDP) for FY21. On the other hand, Barclays emerging markets research has cut India’s calendar year 2020 GDP forecast to 0.0 percent from 2.5 percent earlier.