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IMF cuts India’s growth forecast for 2021-22 to 9.5% from 12.5%

The International Monetary Fund (IMF) lowered India’s growth projection from 12.5% to 9.5% for fiscal 2021-22 – down by three percentage points, following the severe second wave of COVID-19 pandemic in the country.

For the current fiscal year, India witnessed the largest drop in growth projections made by IMF, even as the global economic growth rate remains the same at six per cent.

However, for the next fiscal 2022-23, IMF revised the economic growth for India from 6.9% to 8.5% it had projected in April 2021.

“Growth prospects in India have been downgraded following the severe second COVID wave during March-May and expected slow recovery in confidence from that setback,” IMF said in its latest World Economic Outlook (WEO).

In its second bi-monthly monetary policy committee meeting for fiscal 2021-22 held on June 4, the Reserve Bank of India (RBI) also lowered the country’s gross domestic product (GDP) projection to 9.5%, from 10.5%.

Among the developing nations, the change in economic growth projections for China is – 0.3%, for Saudi Arabia is -0.5%, for Mexico.