As the global economy seems to be slipping into a recession due to the coronavirus outbreak, the International Monetary Fund (IMF) has predicted a GDP growth rate of 1.9 per cent this year for India. While this performance will be India's worst economic performance since 1991, the IMF has placed India as one among the two major countries in the world which will have a positive economic growth this year. The other country is China, whose growth rate has been projected at 1.2 per cent despite sizable fiscal support. "We project global growth in 2020 to fall to minus 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 said, adding that the COVID-19 pandemic will severely impact growth across all regions. READ | Urgent need for more ambitious structural and financial sector reform measures in India: IMF Most countries are expected to experience a fall in the growth rate this year, with United States of America at 5.9 per cent, Japan at 5.2 per cent, United Kingdom at 6.5 per cent, Germany at 7 per cent, France at 7.2 per cent, Italy at 9.1 per cent and Spain at 8 per cent. In Asia, Indonesia is expected to receive a 0.5 per cent boost while Thailand is set to rise exponentially by 6.7 per cent. Several countries have been forecast to experience a slowdown in their economies such as Latin America (5.2 per cent), Brazil (5.3 per cent), Mexico (6.6 per cent), emerging European countries (5.2 per cent) and Russia (5.5 per cent). The Middle East and Central Asia (2.8 per cent), Saudi Arabia (2.3 per cent)and Iran are expected to contract, while sub-Saharan Africa (1.6 per cent), Nigeria (3.4 per cent) and South Africa (5.8 per cent) are expected to grow. The IMF Chief Economist added that that the crisis posed by the pandemic has left uncertainty on the lives of people and their livelihoods. "A lot depends on the epidemiology of the virus, the effectiveness of containment measures, and the development of therapeutics and vaccines, all of which are hard to predict. In addition, many countries now face multiple crises , a health crisis, a financial crisis, and a collapse in commodity prices, which interact in complex ways," she said. READ | Indian economy experienced abrupt slowdown in 2019, but it’s not in a recession: IMF MD Gopinath said that the IMF has projected global growth in 2021 to rebound to 5.8 per cent on the assumption that the pandemic will fade in the second half of 2020. India's projected growth rate for next year is 7.4 per cent, while China's is 9.2 per cent. USA has been predicted to grow at 4.5 per cent, Japan at 3 per cent. "This is a truly global crisis as no country is spared. Countries reliant on tourism, travel, hospitality, and entertainment for their growth are experiencing particularly large disruptions", Gopinath said. READ | IMF lowers global growth forecast for 2019, cites ‘sharp slowdown’ in India 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. Significant economic policy actions have already been taken across the world, focused on accommodating public health care requirements, while limiting the amplification to economic activity and the financial system. (with agency inputs)
