Business & Economy

India predicts GDP to slump 7.7 percent this year, rebound sharply in 2021-22

New Delhi, Jan 29 (efe-epa).- The Indian finance ministry on Friday estimated that the country’s gross domestic product would decline by 7.7 percent in the current fiscal year – set to end in March 2021 – followed by an 11 percent jump in the financial year 2021-22.

“India’s GDP is estimated to contract by 7.7 per cent in FY2020-21, composed of a sharp 15.7 per cent decline in first half and a modest 0.1 per cent fall in the second half,” the finance ministry said in its annual economic survey.

The Indian economy had plummeted during the first quarter of the financial year – between April and June 2020 – by 23.9 percent, its largest ever slump in history, pushing the country into recession for the first time since data is being compiled.

Finance Minister Nirmala Sitharaman presented the economic survey to the parliament ahead of the annual budget being released on Monday.

According to the survey, India’s real GDP would register a record growth of 11 per cent in 2021-22, in line with the predictions of the International Monetary Fund, released on Tuesday. .

The “V-shaped” recovery, in which the Indian economy is expected to rebound rapidly after a major slump, “is supported by the initiation of a mega vaccination drive with hopes of a robust recovery in the services sector and prospects for robust growth in consumption and investment,” the ministry said.

On Jan. 16, India claimed to have launched the largest anti-Covid vaccination drive in the world, aiming to vaccinate 300 million people in three phases spread over six months.

India’s Chief Economic Advisor KV Subramanian said in a press conference after the economic survey’s release that the country was a “unique” example for the world due to its strong economic recovery as well as avoiding a second coronavirus wave.

The South Asian nation has so far registered over 10.7 million Covid-19 cases, including around 19,000 registered on Friday, after touching a record surge of around 100,000 daily cases during the pandemic’s peak in September.

Referring to a strict nationwide lockdown enforced between March and June 2020 – which paralyzed the economy and forced millions of migrant workers to return to their hometowns – Subramanian said that India had opted for “short term suffering” to ensure long-term gains. EFE-EPA


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