India likely to witness the slowest economic growth in 40 years due to coronavirus, predicts World Bank

• According to the World Bank, India, the largest economy in the region, is estimated to grow between 1.5% and 2.8% in FY 21.
  
• Other South Asian countries like Sri Lanka, Nepal, Bhutan and Bangladesh are also going to see a sharp decline in economic growth.
  
• Whereas, Pakistan, Afghanistan and the Maldives are highly likely to sink into recession, said the World Bank report.
  
  

South Asian countries including India are set to witness their worst economic growth in the last 40 years due to coronavirus outbreak. According to the World Bank, India, the largest economy in the region, is estimated to grow between 1.5% and 2.8% in FY 21.

“The green shoots of a rebound that were observable at the end of 2019 have been overtaken by the negative impacts of the global crisis,” the World Bank report said.

The coronavirus outbreak came to India when it was already witnessing a slowdown because of the weak financial sector. Moreover, the 21-day lockdown imposed by PM Modi on March 24 made the situation worse.

About 81% of the workforce in India is reportedly employed in the unorganised section. Soon after the lockdown millions of migrant workers were left without a job.

“The resulting domestic supply and demand disruptions (on the back of weak external demand) are expected to result in a sharp growth deceleration in FY 21 (April 2020 to March 2021),” said the report.

Moreover, if the lockdown continues the results can be much worse than what World Bank had predicted

Previously, the Asian Development Bank (ADB) had predicted a 4% slump in India’s economy in the current fiscal year. While Fitch Rating estimates the Indian economy to grow at 2%.

So far, India has announced a $22billion package including cash transfers to feed and serve the poor during the coronavirus lockdown.

Other South Asian countries like Sri Lanka, Nepal, Bhutan and Bangladesh are also going to see a sharp decline in economic growth. Whereas, Pakistan, Afghanistan and the Maldives are highly likely to sink into recession, said the World Bank report.

See also:

Coronavirus cases in India