Mumbai: Faced with an unprecedented downturn, India needs to continue with critical reforms to reverse the sudden and steep impacts of Covid-19 pandemic on its economy, said the World Bank in its twice-a-year-regional update.
The latest South Asia Economic Focus relaxed on Thursday forecasts a sharper than expected economic slump across the region, with regional growth expected to contract by 7.7 per cent in 2020, after topping 6 per cent annually in the past five years.
India’s economy, the region’s largest, is expected to contract by 9.6 per cent in the fiscal year that started in March 2020. The country’s growth is projected to rebound to 5.4 per cent in FY22, mostly reflecting base effects, assuming Covid-related restrictions are completely lifted by 2022. Weak activity, domestically and abroad, is also likely to depress both Indian imports and exports.
“The response of the government of India to the Covid-19 outbreak was swift and comprehensive. The government implemented a national lockdown to contain the health emergency. This was followed by a comprehensive policy package to mitigate the impact on the poorest through various social protection measures as well as liquidity and financial support for small and medium enterprises.
The World Bank is partnering with the government to strengthen policies, institutions, and investments for building back better,” said Hartwig Schafer, World Bank Vice President for the South Asia Region
