With Widespread Vaccination, Indian Economy To Contract By 9.6% In 2020-21: World Bank
Writer: Navya Singh
Navya writes and speaks about matters that often do not come out or doesn’t see daylight. Defense and economy of the country is of special interest to her and a lot of her content revolves around that.
India, 6 Jan 2021 6:10 AM GMT
Editor : Prateek Gautam |
A free soul who believes that journalism, apart from politics, should stand for social cause and the environment.
Creatives : Rajath
A free spirit who find meaning in life with the virtue of creativity and doing job par its excellence, animal lover and traveller by heart.
"The forecast for 2021-22 assumes that a vaccine will be distributed on a large scale in the region starting the second half of 2021 and that there is no widespread resurgence in infections," the World Bank report read.
The Indian Economy is expected to contract 9.6 per cent during the current financial year but can recover by 5.4 per cent next financial year if there is widespread vaccination against Coronavirus, the World Bank said in its Global Economic Prospects report on Tuesday, January 5.
"The forecast for 2021-22 assumes that a vaccine will be distributed on a large scale in the region starting the second half of 2021 and that there is no widespread resurgence in infections," the report read.
"In India, the pandemic hit the economy at a time when growth was already decelerating" and "the estimated contraction of the economy by 9.6 per cent during 2020-21 reflects "a sharp drop in household spending and private investment," it read.
The global economy, which contracted by 4.3 per cent in 2020 is expected to grow by 4 per cent next year if "an initial Covid-19 vaccine rollout becomes widespread throughout the year", the report mentioned.
The 5.4 per cent growth rate forecast for 2021-22 would be "offset by muted private investment growth given (that the) financial sector weaknesses", the WB report said pointing that "in the financial sector, non-performing loans were already high before the pandemic".
Focusing on the South Asian region, the World Bank said that the economy fell by 6.7 per cent in 2020 "reflecting the effects of the pandemic and nationwide lockdowns, particularly in Bangladesh and India".
"Activity rebounded in the second half of last year, led by industrial production, as initial stringent lockdowns were eased," it added.
The report also highlighted other risks including "financial and debt distress caused by an abrupt tightening of financing conditions or possible widespread corporate bankruptcies".
"Additional stress on domestic banks in the region could be triggered by the economic consequences of a more protracted recovery from the pandemic, which in turn could lead to a rise in bankruptcies and weaken the balance sheets of the banking and non-banking sectors," it added.
According to the Bank, China is expected to see its economy grow by 7.9 per cent.
Also Read: States Step Up Measures To Contain Spread Of Bird Flu After Thousands Of Birds Drop Dead Across Country