IMF downgrades India’s GDP growth rate for 2021-22
The second wave of Corona has also had a bad effect on the economy of the country. The International Monetary Fund (IMF) on Tuesday slashed India’s GDP growth by 3% to 9.5% for the financial year 2021-22, from 12.5% earlier.
The IMF released the latest report of the World Economy Outlook (WEO) on Tuesday. The report said that India’s growth will be affected due to the second wave of corona during March to May. This estimate of the IMF on GDP is the same as that of the Reserve Bank, which is 9.5%.
Moody’s including RBI, World Bank have also reduced their estimates on India’s GDP
- RBI: India’s GDP growth forecast for the financial year 2021-22 has been reduced from 10.5% to 9.5%.
- SBI: For the current financial year 2021-22, the GDP growth rate has been reduced from 10.4% to 7.9%.
- World Bank: Lowered GDP growth forecast from 10.1% to 8.3%.
- Moody’s slashed India’s growth forecast for the financial year 2021-22 to 9.6% from 13.9%.
- S&P: Lowered GDP growth forecast from 11% to 9.5%.
- Asia Development Bank (ADB): India’s GDP growth rate reduced from 11% to 10% in the financial year 2021-22.
India will be the fastest growing economy in the world
The IMF said in its report that the growth rate for 2022-23 will be 8.5%, which is 160 basis points higher than the earlier estimate. According to the report, if this happens, then India will be the fastest growing economy in the world. After this, China’s economy is expected to grow at a rate of 5.7%. At the same time, Chief Economic Advisor (CEA) Krishnamurthy Subramaniam said that the economy is expected to grow at 6.5% to 7% in the financial year 2023.
Concerns over increase in corona cases and lack of vaccine
IMF Chief Economist Gita Gopinath said that growth picked up pace due to better than expected rates of vaccination and rapid improvement in the situation, but in some countries the growth rate has been reduced due to increase in corona cases and lack of corona vaccine. She said that about 40% of the population of the advanced economy has been vaccinated. At the same time, only 11% of the population of the emerging market economy has been able to get the vaccine.
