By Aditya Raghunath
Investing.com -- The World Bank has cut India’s GDP forecast to 8.3% for FY22 against its earlier 10.1% in the wake of the second wave of the pandemic and the devastating impact it has had on India’s economy.
“India's recovery is being hampered by the largest outbreak of any country since the beginning of the pandemic,” the World Bank said in its latest issue of Global Economic Prospects. The “enormous” second wave has hit the sharper-than-expected recovery in the second half of FY21, the bank said.
That said, the 8.3% figure is an upward revision from the World Bank’s 5.4% forecast that it had made in January. The World Bank said this revision “masks significant expected economic damage from an enormous second COVID-19 wave and localized mobility restrictions since March 2021.”
“Activity will benefit from policy support, including higher spending on infrastructure, rural development, and health, and a stronger-than-expected recovery in services and manufacturing,” the report says.
For FY23, the World Bank expects India to grow at 7.5% as the pandemic’s effects on companies, households and banks continues. “The pandemic will undermine consumption and investment as confidence remains depressed and balance sheets damaged. Growth in FY 2022/23 is expected to slow to 7.5%, reflecting lingering impacts of COVID-19 on household, corporate and bank balance sheets; possibly low levels of consumer confidence; and heightened uncertainty on job and income prospects,” it said.
World Bank Cuts India's GDP Forecast for FY22 to 8.3% from 10.1% on COVID Impact - Investing.com India
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