The International Monetary Fund (IMF) on Wednesday lowered its estimation for Global GDP 2020. According to the new projection, Global GDP 2020 will decline by 4.9 percent, 1.9 percentage points below the April forecast. The IMF projected that Indian GDP 2020 will see a sharp contract by -4.5 percent.
World Bank said that Indian GDP decline is at a ‘historic low,’ citing the economic slowdown due to the two-month-long lockdown implemented in the country to control Covid-19.
“Indian GDP 2020 is projected to contract by 4.5 percent following a long period of lockdown. And slower recovery than anticipated in April,” said the IMF, in its updated World Economic Outlook released in April.
The IMF record tells this growth of India is the lowest since 1961. Beyond that year data is not available with the IMF.
IMF, however, added that India is expected to bounce back strongly in 2021 with an estimated 6 percent growth.
Earlier, India’s GDP forecast for the month of April was 1.9 percent. Now according to the new estimates, India’s GDP forecast fell by -6.4 percent. The new Indian GDP 2020 estimate for the year 2021, 6 percent is less by -1.4 percent than its April forecast.
Talking about the global growth IMF said Indian GDP 2020 will decline at a rate worst since the great depression and contract is higher than seen during World War II.
“Over 75 percent of countries are now reopening at the same time as the pandemic is intensifying in many emerging markets and developing economies. Several countries have started to recover. However, in the absence of a medical solution, the strength of the recovery is highly uncertain and the impact on sectors and countries uneven,” said Gita Gopinath in an IMF Blog Post.
She said that the present global crisis is never seen will have a recovery like no other. IMF projected deep turndown in Indian GDP 2020 2020 for both advanced economies at -8 percent. And developing nations at -5 percent excluding China. 95 counties are projected to have negative growth in the year 2020, while China will grow at 1 percent.
The United States is the worst-hit nation due to the pandemic with the highest number of infections around the world. The IMF predicts the US to contract by -8 percent this year, more than the April estimates when it was at -5.9 percent.
European countries such as Italy, Spain, France, and the United Kingdom which are among the worst-hit nations, implemented long lockdowns. Italy will contract by -12.8 percent, Spain will also see a double-digit decline of its GDP at -12.8. France’s GDP will decline by -12.5 percent and the UK, where the government implemented lockdown late will also see a decline of -10.2 percent.
Gita Gopinath also said that economic activity can see a quick resumption based on better news about the vaccine and additional support policy. However, she added, “new waves of infections can reverse increased mobility. And spending, and rapidly tighten financial conditions, triggering debt distress.”
We can just hope for the Coronavirus to depart and see economies around the world thriving again!