InvestorQ : What will be the growth rate of the Indian economy for the calendar year 2020, stretching from Jan-Dec 2020?
Chandralekha Desai made post

What will be the growth rate of the Indian economy for the calendar year 2020, stretching from Jan-Dec 2020?

NISHA Nayak answered.
2 months ago

For the calendar year 2020, which is the normal benchmark that most of the countries globally use, the Indian economy is projected to contract by -9.6%. However, this growth is likely to revive to 7.3% in 2021. This is largely on account of the lockdowns and other efforts to control the COVID-19 pandemic leading to a sharp fall in domestic consumption. However, the revival is likely to sharp as things get back to normal.

These projects were put out by the United Nations Department of Economic and Social Affairs or the UN-DESA. The overall global economy is estimated to have contracted by -4.3% in 2020, although China managed to hold on at positive growth of 2.3% in the calendar year 2020. The global economy is expected to grow at 4.7% in 2021 and compensate for the contraction of 2020, putting the global economy back at 2019 levels by the year 2022.

It may be recollected that the Indian economy grew at 4.7% in 2019 and is now expected to contract by 9.6% in calendar 2020. Of course, this is based on the assumption that the bounce in 2021 will be aided with a successful vaccine program and the consumption and growth coming back. For 2021, India is expected to grow at 7.3% and will be the fastest growing large economy in the world followed by Chin at 7.2%.

The report has noted that the pandemic and the global economic crisis had left deep scars on South Asia, which was already vulnerable to growth shocks. This region would be looking at India to lead the way out of the slowdown. For the South Asian region, the regional economic growth for 2022 is forecast at 5.3%. Even though, by 2022, the overall economic output will exceed that of 2019, it will only be a marginal growth in 3 years.

The report by the UN has also criticised the fiscal response to COVID-19 across South Asia as it has consisted of a number of ad-hoc and reactive measures of expansion of social assistance and direct cash transfers for the needy. However, such programs have been proven to be insufficient even in the past. The report also noted that the eservices trade could be a key drive in the coming days.