India’s Economy to Contract by 3.2% in FY 2020-21, Says World Bank

The report added that the stringent measures to restrict the spread of the virus will contribute to the contraction

Image used for representational purposes.

(Photo: Altered by The Quint)

The World Bank on Monday, 8 June, in its report 'Global Economic Prospects' said India's economy is projected to contract by 3.2 percent in fiscal year 2020/21.

The Washington-based multilateral lender said, "In India, growth is estimated to have slowed to 4.2 percent in financial year 2019/20 and output is projected to contract by 3.2 percent in financial year 2020/21, when the impact of COVID-19 will largely materialise."

The report added that the stringent measures to restrict the spread of the virus, which heavily curtail activity, will contribute to the contraction.

“Spillovers from contracting global growth and balance sheet stress in the financial sector will also adversely impact activity, despite some support from fiscal stimulus and continued monetary policy easing.”

The World Bank

The growth rate of the Indian economy in fiscal 2017 was seven percent, which dropped to 6.1 percent in fiscal 2018 and to 4.2 percent in fiscal 2020, it said.