(Image source from: harvard.edu)
After the lockdown, every country across the world has seen major economic crisis. Talking of India, IMF Chief economist, Gita Gopinath says, fiscal and monetary policy support should not be withdrawn.
As per the International Monetary Fund, in FY-21, India’s GDP is going to improve and the target is to improve by 10.3% after a 4.5% drop in June and all the fluctuation in economic activities.
According to IMF, a contract is likely to take place between emerging markets and all the developing economies this year.
As per the forecast, revisions are large for India. The GDP contracted all the more in the second quarter(June).
In June, India’s GDP contracted upto 23.9%. This made it the worst performer among the other G20 economies.
RBI agreed to the fact that our economy will contract 9.5% in FY21 and there would be an expansion in the economic activity in March quarter.
IMF chief economist, Gita Gopinath said “The ascent out of this calamity is likely to be long, uneven, and highly uncertain. It is essential that fiscal and monetary policy support are not prematurely withdrawn, as best possible."
Gopinath talks of how India has been managing crisis with fewer resources that includes debts and higher borrowing costs.
IMF mentions that there is a possibility for the pandemic to worsen or impact the progress and hard work in reducing poverty and inequality since 1990.
Further, the IMF said that this year all the daily wage workers income might become lesser than $1.90 a day because of extreme deprivation.
According to Gopinath’s estimation, there could be a growth of 11 trillion from 2020-21 to 28 trillion over 2020-25.
By Neha Makhija