Chennai: The World Bank today said that India’s GDP is expected to contract by 9.6 per cent this fiscal due to the lockdown and the income shock experienced by households and firms due to the Covid-19 pandemic.
It also said that the country’s economic situation is ‘much worse’ than ever seen before.
In its latest South Asia Economic Focus report ahead of the annual meeting of the World bank and International Monetary Fund, the global lender 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 six per cent annually in the past five years.
‘India’s GDP is expected to contract by 9.6 per cent in the fiscal year that started in March,’ it said.
Regional growth is projected to rebound to 4.5 per cent in 2021, it said.
Factoring in population growth, however, income-per-capita in the region will remain 6 per cent below 2019 estimates, indicating that the expected rebound will not offset the lasting economic damage caused by the pandemic, it said.
‘The situation is much worse in India than we have ever seen before,’ Hans Timmer, World Bank Chief Economist for South Asia told reporters during a conference call.