Averting divergent outcomes would mean “resolving the health crisis everywhere” the report says
After an estimated contraction of 8% in the fiscal year that ended March 31, India is projected to grow at 12.5 % during the current year, settling down to 6.9% growth year (FY22/23), according to the World Economic Outlook (WEO): Managing Divergent Recoveries, released by the IMF as the World Bank IMF Spring Meetings kick off virtually. The growth outlook for India however comes with significant downside risks because of the current pandemic wave the country is experiencing, IMF economists said.
The projections for India were based on evidence to support the normalization of economic activity but these forecasts preceded the current wave of COVID-19 in India, “ which is quite concerning,” IMF Chief Economist Gita Gopinath said at a press conference on Tuesday.
Downside risks remain high as coronavirus cases touched a peak not seen since October 11.
India s economy will grow at a faster pace this fiscal year than previously thought, according to a Reuters poll of economists who warned a surge in coronavirus cases was the biggest risk to growth.
Downside risks remain high as daily reported coronavirus cases touched a peak not seen since October 11 on Thursday and a few states have renewed restrictions, although the continuing vaccination drive could avoid a complete lockdown.
The March 26-April 1 poll showed economists now expect the economy to grow a record 27.0 per cent this quarter after expanding only 1.5 per cent in the January-March period compared to 21.1 per cent and 1.0 per cent predicted previously.
India s economic development which saw early progress of skill intensive industries and services worries Nobel laureate Paul Krugman. One thing that does worry me about India s economic profile is its path. There s this precocious development of skill intensive industries, skill intensive services in particular, Krugman said. He was responding to a query Will high and capital technology actually increase the costs for industry and increased poverty and unemployment in countries such as India and Bangladesh? posed by former chief economic advisor Arvind Subramanian. Krugman said skill intensive industries generate a lot of gross domestic product (GDP) and exports but they do not generate a lot of jobs, and probably significantly exacerbated inequality.
Synopsis
The India Services Business Activity Index rose to 55.3 in February from 52.8 in January. A figure above 50 indicates expansion, while a sub-50 reading shows contraction.
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Employment continued to fall for the third month in a row and companies noted the sharpest rise in overall expenses for eight years.
A quicker increase in new orders made India’s service providers expand business activity at the fastest rate in a year in February with the Covid-19 vaccine rollout leading to an improvement in business confidence, a private survey showed Wednesday.
The India Services Business Activity Index rose to 55.3 in February from 52.8 in January. A figure above 50 indicates expansion, while a sub-50 reading shows contraction.
India s gross domestic product expanded 0.4% in the three months ended December, after contracting for two consecutive quarters, mainly due to good performance by farm, services and construction sectors, according to government data released on Friday. This will help Asia’s third-largest economy exit an unprecedented recession even as it battles new challenges posed by a surge in coronavirus infections. The country s economic growth shrank 7.5% a quarter ago. In its second advance estimates of national accounts, the National Statistical Office (NSO) has projected 8% contraction in 2020-21. Trade and hotel industry registered a contraction of 7.7% during the third quarter this fiscal, as the sectors continued to suffer on account of coronavirus pandemic.