World Bank slashes 2021-22 GDP growth forecast for Indian economy to 8.3%

A worker at a factory in Kanpur.

The World Bank on Tuesday slashed its 2021-22 GDP growth forecast for the Indian economy to 8.3 per cent from 10.1 per cent estimated in April, saying economic recovery is being hampered by the devastating second wave of coronavirus infections.

It projected a 7.5 per cent economic growth in the 2022-23 fiscal.

The Washington-based global lender, in its latest issue of Global Economic Prospects released here, said an enormous second Covid-19 wave in India is undermining the sharper-than-expected rebound in activity seen during the second half of the 2020-21 fiscal, especially in services.

‘‘India’s recovery is being hampered by the largest outbreak of any country since the beginning of the pandemic,” the World Bank said.

The projected growth compares to the worst ever contraction of 7.3 per cent witnessed in the fiscal ended March 31, 2021 and 4 per cent expansion in 2019-20.

In April this year, the World Bank had forecast a 10.1 per cent growth in Indian GDP for FY22. This was higher than 5.4 per cent it had projected in January. But now the projections have been slashed.

The multilateral lending agency said India’s GDP is likely to grow by 6.5 per cent in 2023-24. In its report, the Bank said that the global economy is set to expand by 5.6 per cent in 2021 — its strongest post-recession pace in 80 years.

‘‘For India, GDP in fiscal year 2021/22 starting from April 2021 is expected to expand 8.3 per cent,” it said.

Activity will benefit from policy support, including higher spending on infrastructure, rural development, and health, and a stronger-than expected recovery in services and manufacturing, it said.

The forecast for FY22 factors in expected economic damage from an enormous second Covid-19 wave and localised mobility restrictions since March 2021, the report said.

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