The World Bank gave a reality check on Monday, saying, “The ongoing COVID-19 pandemic will stab the world into an acute recession, the worst since World War II, cutting up per capita incomes and pushing millions into the vicious cycle of poverty”.
The global economy is likely to turn down 5.2% in 2020, it declared. Contraction in economic growth across region will be driven by serious disordering to “domestic demand and supply, trade and finance”, the bank revealed in a report, Global Economic Prospects, which contains an assessment of economic hiccups and shocks from pandemic lockdowns.
In India, the bank predicted that Gross Domestic Product (GDP) will reduce to 3.2% in the fiscal year 2020-21, when the “impact of the pandemic will intensely hit”. GDP, or the value of all goods and services produced, is the most reliable measure of incomes produced in an economy. The International Monetary Fund has tear apart its 2010-21 growth projection for India to 1.9% from 5.8% estimated in January. Barclays informed it saw 0% growth, while the World Bank wiped off India’s growth forecast to 1.5-2.8% from 6.1% earlier.
“Stringent measures to control the spread of the virus will heavily retrench activity, even after seeking support from fiscal and monetary stimulus. Spill-overs from weaker global growth and balance-sheet stress in the financial sector will also impact on activity.”The World Bank in its announcement on India revealed.