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World Economic Outlook Report 2021: Keypoints

World Economic Outlook: IMF

The latest World Economic Outlook of the International Monetary Fund (IMF) has estimated that India’s Gross Domestic Product (GDP) will grow by 11.5% in the Financial Year (FY) 2021-22.

India Specific Projections:

  • FY 2020-21: For the current fiscal, the IMF had forecast a record 10.3% contraction.
  • FY 2021-22: For the next fiscal, starting from April 1st, GDP growth projection is at 11.5%, 2.7% higher than the projection made in October, 2020.
  • Last October, the IMF had projected an 8.8% real GDP growth for India in FY 2021-22, highest globally.
  • FY 2022-23: In FY 2022-23, the economy will likely grow 6.8%.

Governments Projection for 2020-21:

  • The latest revision for the current fiscal is higher than the government’s first advance estimate of 7.7% and also the RBI’s estimate of 7.5%.
  • Reason for Increase in the Estimates by IMF:
    • India has taken very decisive action, very decisive steps to deal with the pandemic and to deal with the economic consequences of it.

Global Projections:

  • The global economy is projected to grow 5.5% in 2021 and 4.2% in 2022.
  • The IMF also saw a narrower 3.5% contraction in world output in 2020 as opposed to a 4.4% decline seen earlier.
  • It attributed the 0.3% point upward revision for 2021 to “expectations of a vaccine-powered strengthening of activity later in the year and additional policy support in a few large economies.