By Aditya Raghunath
Investing.com -- The World Bank’s latest South Asia Economic Focus report says that India has bounced back remarkably from the COVID-19 pandemic but is still not completely out of the woods. That said, the country’s real GDP for FY22 could be in the range of 7.5%-12.5%, a solid jump from this fiscal’s numbers.
“As economic activity normalises, domestically and in key export markets, the current account is expected to return to mild deficits (around 1 per cent in FY22 and FY23) and capital inflows are projected by continued accommodative monetary policy and abundant international liquidity conditions,” the report said.
The World Bank report said that India’s growth was already slowing before the pandemic. It hit a high of 8.3% in FY17 before falling to 4% in the last financial year. The slowdown was a result of a deceleration in private consumption and shocks to the financial sector after the collapse of a large non-bank financial institution (IL&FS).
“Given the significant uncertainty pertaining to both epidemiological and policy developments, the real GDP growth for FY21-22 can range from 7.5 to 12.5 per cent, depending on how the ongoing vaccination campaign proceeds, whether new restrictions to mobility are required, and how quickly the world economy recovers,” the World Bank said.
However, massive challenges remain, the most significant one being vaccination of the entire population.
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