As India reels under the COVID-19 pandemic and the resulting lockdown, the International Monetary Fund (IMF) Tuesday projected a GDP growth rate of 1.9 per cent for the country in 2020.
But the IMF, in its latest edition of the World Economy report, has named India as the fastest-growing emerging economies of the world.
The IMF’s projection for the country’s GDP growth came as countries around the globe are witnessing the worst recession since the Great Depression of 1929, owing to the coronavirus pandemic that has brought the industries to a grinding halt.
Considering the IMF’s forecast, India is likely to record its worst growth performance since the liberalisation in 1991, news agency PTI reported.
IMF said that India is among the only two major countries, which will record a positive growth rate in 2020. The other being China, for which the IMF has projected a growth rate of 1.2 per cent.
“We project global growth in 2020 to fall to -3 per cent. This is a downgrade of 6.3 percentage points from January 2020, a major revision over a very short period,” Indian-American Gita Gopinath, the IMF Chief Economist was quoted as saying, adding that the COVID-19 pandemic will severely impact growth across all regions.
Most countries, in the advanced economy group, are forecast to contract this year, including the United States (–5.9 per cent), Japan (–5.2 per cent), the United Kingdom (–6.5 per cent), Germany (–7.0 percent), France (–7.2 per cent), Italy (–9.1 per cent), and Spain (–8.0 per cent), the IMF report said.
The IMF said several economies in the region were expected to grow at modest rates, including India (1.9 per cent) and Indonesia (0.5 per cent), and others are forecast to experience large contractions (Thailand, –6.7 per cent).
The IMF said that other regions are projected to experience drastic slowdowns in economic activity, including Latin America (–5.2 per cent) — with Brazil’s growth forecast at –5.3 per cent and Mexico’s at –6.6 per cent; emerging and developing Europe (–5.2 per cent) with Russia’s economy projected to contract by –5.5 per cent.
The Middle East and Central Asia (–2.8 per cent) with Saudi Arabia’s growth forecast at –2.3 per cent, with non-oil GDP contracting by four per cent, and most economies, including Iran, expected to contract; and sub-Saharan Africa (–1.6 per cent) with growth in Nigeria and South Africa expected at –3.4 per cent and –5.8 per cent respectively.
This is a crisis like no other, and there is substantial uncertainty about its impact on people’s lives and livelihoods, Gopinath was quoted as saying.
IMF also said that India’s growth rate in 2021 is projected at 7.4 per cent, while that of China at 9.2 per cent. The United States has been projected to grow at 4.5 per cent and Japan 3 per cent, the IMF report said.
This is a truly global crisis as no country is spared, Gopinath added.
Countries reliant on tourism, travel, hospitality, and entertainment for their growth are experiencing particularly large disruptions, she said.
According to the World Economic Report, the rebound in 2021 depends critically on the pandemic fading in the second half of 2020, allowing containment efforts to be gradually scaled back and restoring consumer and investor confidence.