Economy to shrink 10.3 per cent in 2020, 8.8 per cent rebound growth in 2021: IMF

However, India is likely to bounce back with an impressive 8.8 per cent growth rate in 2021, thus regaining the position of the fastest growing emerging economy, surpassing China’s projected growth rate of 8.2 per cent, the IMF said in its latest ‘World Economic Outlook’ report.

Released ahead of the annual meetings of the IMF and the World Bank, the report said global growth would contract by 4.4 per cent this year and bounce back to 5.2 per cent in 2021.

America’s economy is projected to contract by 5.8 per cent in 2020 and grow by 3.9 per cent the next year, the IMF said.

China is the only country, among the major economies, to show a positive growth rate of 1.9 per cent in 2020, it said.

The IMF in its report said revisions to the forecast are particularly large for India, where Gross Domestic Product (GDP) contracted much more severely than expected in the second quarter.

“As a result, the economy is projected to contract by 10.3 per cent in 2020, before rebounding by 8.8 per cent in 2021,” it said. In 2019, India’s growth rate was 4.2 per cent.

According to the IMF, India is among those likely to suffer the greatest damage from global warming, reflecting its initially high temperatures. For India, the net gains from climate change mitigation-relative to inaction-would be up to 60-80 per cent of GDP by 2100.

While estimates of losses from climate change are somewhat smaller for colder regions (for example, Europe, North America, and east Asia), these are likely underestimations as they do not include a number of damages (for example, rise in sea levels, natural disasters, damage to infrastructure from thawing of permafrost in Russia) and negative global spillovers from large economic disruptions in other parts of the world.

Last week, the World bank said India’s GDP this fiscal is expected to contract by 9.6 per cent. “The situation is much worse in India than we have ever seen before,” Hans Timmer, World Bank Chief

 Economist for South Asia, told reporters during a conference call last week. “It is an exceptional situation in India. A very dire outlook,” he said. There was a 25 per cent decline in GDP in the Q2 of the year, which is the Q1 of the current fiscal year in India.