The Indian economy is projected to contract by 10.3 per cent this year due to impact of COVID-19 but will rebound with 8.8 per cent growth the following year and regain its position as the fastest-growing emerging economy, the International Monetary Fund (IMF) said on Tuesday.
The global economic growth is estimated to dip by 4.4 per cent in 2020 and bounce back to 5.2 per cent growth in 2021, the IMF said in its latest 'World Economic Outlook' report, released ahead of the annual meeting of the IMF and the World Bank.
"All emerging market and developing economy regions are expected to contract this year, including notably emerging Asia, where large economies, such as India and Indonesia, continue to try to bring the pandemic under control," the IMF said in its report.
According to the IMF's projection, India is projected to regain its position as the fastest-growing emerging market and developing economies in 2021, with 8.8 per cent economic growth, followed by China at 8.2 per cent.
It said that the revisions to the forecast are particularly large for India, where the Gross Domestic Production contracted much more severely than expected in the second quarter.
The economic outlook of the developed countries including the United States, Japan and the United Kingdom are also projected to contract by 4.3, 5.3 and 9.8 per cent respectively according to the IMF report.
"Countries with fast economic or population growth (India, especially; China, to a lesser extent) and most oil producers are bound to experience larger economic costs by forgoing cheap forms of energy, such as coal or oil," the report said.
"These output costs nevertheless remain modest relative to baseline growth for most. For example, with the policy package, India's GDP would be 277 per cent higher in 2050 than today, only moderately below what it would have been with unchanged policies (287 per cent)," it said.
The report said India is among those likely to suffer the greatest damage from global warming.
"For India, the net gains from climate change mitigation--relative to inaction--would be up to 60-80 per cent of GDP by 2100," the report said.
Reserve Bank of India (RBI) had earlier this month projected that the GDP would contract by 9.5 per cent in the current financial year amid disruptions caused by the coronavirus pandemic and it may turn positive in the last quarter (January to March).
( With inputs from ANI )
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