The International Monetary Fund (IMF) cut Indian economic growth to 1.9% this year, a sharp slowing from the 4.2% expansion logged last year and from 5.8% projected in January. The IMF warned that the global economy is set for a severe recession that is going to be the worst since the Great Depression of the 1930s, as coronavirus, or Covid-19, pandemic claims thousands of human lives and the containment measures adopted to slow the outbreak hamper economic activity. Next year, India's GDP is expected to jump 7.4 percent. The coronavirus pandemic came at a time when India's economy was already slowing, due to persistent financial sector weaknesses. The severe disruption of economic activities caused by covid-19, both through demand and supply shocks, has overtaken the incipient recovery in the Indian economy leading to massive job losses.
World GDP is set to contract 3 percent this year, thanks to the lockdowns imposed by countries across the world, the IMF said in its latest World Economic Outlook report. The lender expects the global GDP to grow 5.8 percent next year. In a January update to the WEO, the IMF had predicted 3.3 percent global growth this year and 3.4 percent expansion for next year. In 2019, the world economy grew 2.9 percent. These projections are based on a scenario that assumes the pandemic will fade in the second half of 2020 and the containment measures can be gradually unwound as economic activity normalizes.
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