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IMF likely to downgrade India’s growth forecast due to COVID-19 crisis

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The second wave of COVID-19 pandemic that is wreaking havoc in India with queues outside hospitals and crematoriums getting longer and several states going into lockdown is likely to affect India’s growth prospects as predicted by the International Monetary Fund (IMF).

The agency is most likely to downgrade its growth forecast for India when it issues a fresh World Economic Outlook in July due to the unavoidable ramifications of the recent surge in COVID cases and deaths.

Notably, IMF had predicted a growth rate of 11.5% for India in 2021 in January. However, it upgraded the growth rate to 12.5% in April as the Indian economy witnessed a V-shaped recovery after months of uncertainty due to the COVID-19 pandemic.

What IMF said

IMF spokesman Gerry Rice said IMF will revisit that forecast when it issued a fresh World Economic Outlook in July. Rice, however, did not elaborate on the issue. He also said the developments in India would have spillover effects for the region and the global economy, depending on how long the crisis lasted, but it was too soon to give specifics.

Also Read: IMF upgrades India’s projected growth in 2021 to 12.5%—highest in the world 

“We are all watching what is happening in India with concern,” Rice said. “There will be spillovers … contingent on how deep and how long the severity of this crisis continues,” he added.

COVID-19 situation in India

The health ministry on Friday informed that over 4.14 lakh fresh cases of COVID-19 have been reported in India in the past 24 hours. The addition of the fresh cases has taken the COVID-19 case tally past 2.14 crore. It is the highest single-day surge in cases in India since the pandemic began last year.

Also, 3,915 COVID-19 related deaths were reported by the ministry during this period. The addition of the fresh fatalities has taken India’s death toll due to the deadly virus to 2,34,083. It is the second-highest number of deaths reported in a day since the pandemic began last year.

Of the over 2.14 crore coronavirus cases reported so far, over 36.45 lakh are active cases of the virus. It is 16.96 per cent of the total caseload. Interestingly, over 1.76 crore cases have recovered from the viral infection so far.

 

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