India’s economic growth forecast was slashed further by the International Monetary Fund (IMF) today, with the country now facing the biggest contraction of major emerging markets in the wake of the coronavirus pandemic.
Gross domestic product (GDP) will shrink 10.3% in the fiscal year to March 2021, the Washington-based lender said in its World Economic Outlook, far worse than the 4.5% decline predicted in June. The 5.8 percentage-point downgrade was the biggest of the world’s main economies.
In the group of emerging economies “revisions to the forecast are particularly large for India, where GDP contracted much more severely than expected in the second quarter,” the IMF said in its report.
India’s lockdown at the end of March was the world’s largest, causing the economy to contract 23.9% in the June quarter from a year ago as businesses and jobs were devastated. Authorities have failed to get the pandemic under control since then, with the number of coronavirus cases exceeding 7 million, second only to the US.