COVID fallout: World Bank cuts India’s FY22 growth forecast to 8.3 per cent

NEW DELHI:  The World Bank on Tuesday cut down its forecast for India’s GDP growth in fiscal year 2021-22 from 10.1 per cent in April to 8.3 per cent. 

The multinational financier cited the country’s struggle with the second wave of the Covid-19 pandemic, which it says has hampered India’s economic recovery.

The World Bank also projected a growth of 7.5 per cent in FY 2022-23. 

India had recorded its worst ever contraction of 7.3 per cent in the fiscal year ended March 31, 2021 (FY21) and a 4 per cent expansion in 2019-20. According to the World Bank, India’s GDP is likely to grow by 6.5 per cent in 2023-24.

The global lender made the forecast in its latest issue of Global Economic Prospects, noting that its “recovery is being hampered by the largest outbreak of any country since the beginning of the pandemic. 

Its forecast for India factors in  the impact and the World Bank expects economic activity to follow the same, yet less pronounced, collapse and recovery pattern seen during the first wave. 

“The pandemic will undermine consumption and investment as confidence remains depressed and balance sheets damaged. Growth in FY23 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,” the report pointed out, adding that policy support would help offset the impact. 

As for the global economy, itsaid that it expects an expansion of 5.6 per cent in 2021, the strongest growth since the post-recession pace recorded 80 years ago. 

• 8.3 per cent India GDP growth in FY22.

• 7.5 per cent India GDP growth in FY23.