The World Bank has raised India’s GDP growth projection to 10 percent in Financial Year 2021-22. It said that India’s economic growth in FY22 is likely to be in the range from 7.5% to 12.5%, amid the challenges caused by the Covid-19 pandemic.
The projection of 10.1% is 4.7 percentage points higher than the earlier estimate shared by the World Bank for India’s growth in 2021. The new projection reflects the pace of the country is in the path of recovery.
However, the Bank also expects the Indian economy is likely to contract by 8.5% in FY21, higher than the centre’s own estimate of 8%.
“Given the significant uncertainty pertaining to both epidemiological and policy developments, real GDP (gross domestic product) growth for FY21/22 can range from 7.5 to 12.5%, depending on how the ongoing vaccination campaign proceeds, whether new restrictions to mobility are required, and how quickly the world economy recovers,” said the World Bank in its report titled “South Asia Vaccinates”.
The report further said that “The main risks to the outlook include the materialisation of financial sector risks, which could compromise a recovery in private investment, and new waves of Covid-19 infections.”
“In response to the Covid-19 outbreak, the authorities implemented a nationwide lockdown, which brought economic activity to a near standstill between April and June 2020 (Q1FY21),” said the World Bank report.