In its report ‘India Development Update’ for July 2020, the World Bank said amid rapidly evolving conditions, projections made in May are likely to be revised as new information is incorporated, especially as the daily number of cases continues to increase resulting in several states and districts re-imposing lockdowns, and available high frequency indicators show that the economy has not yet reverted to baseline.

In May, the World Bank had projected the Indian economy to contract by 3.2 per cent in FY 2020-21, and predicted rebound slowly in the next fiscal. In its report released on Wednesday, the World Bank said in the current, rapidly evolving context these projections are likely to be revised as new information is incorporated.

“In our revised projections, which would be available in October 2020, we would likely project a steeper contraction in the economy,” it said. Although a rebound is expected in FY 2021-22, it will take place “very slowly, reflecting the impact of the crisis not only on India’s current growth but also on potential output, which is expected to return to trend only over the next several quarters.”