The International Monetary Fund (IMF) lowered India’s growth projection from 12.5 per cent to 9.5 per cent for fiscal 2021-22 – down by three percentage points, following the severe second wave of COVID-19 pandemic in the country. For the current fiscal year, India witnessed the largest drop in growth projections made by IMF, even as the global economic growth rate remains the same at six per cent.
However, for the next fiscal 2022-23, IMF revised the economic growth for India up from 6.9 per cent to 8.5 per cent it had projected in April 2021 – higher by 1.6 percentage points.
“Growth prospects in India have been downgraded following the severe second COVID wave during March-May and expected slow recovery in confidence from that setback,” IMF said in its latest World Economic Outlook (WEO).
In its second bi-monthly monetary policy committee meeting for fiscal 2021-22 held on June 4, the Reserve Bank of India (RBI) also lowered the country’s gross domestic product (GDP) projection to 9.5 per cent, from 10.5 per cent.
Among the developing nations, IMF has downgraded the economic growth projections for India at three per cent, for China at 0.3 per cent, and for Saudi Arabia at 0.5 per cent. While the change in economic growth projections made by IMF for the rest of the developing countries including Mexico, Brazil, South Africa, among others, is in positive terms.
Recording its worst-ever performance in more than four decades, India registered a de-growth of 7.3 per cent for fiscal year 2020-21, while the preceding January-March quarter of the fiscal showed a slight rise of 1.6 per cent.