World Bank cautions on consumer confidence
The renewed outbreak of COVID-19 may require further targeted policy support to address the health and economic costs though the Indian government’s fiscal policy shifted in the FY 2021/22 budget toward higher expenditure targeted at healthcare and infrastructure to boost the post-pandemic recovery, said the World Bank.
The government had announced that the health-related spending would more than double and set out a revised medium-term fiscal path intended to address the economic legacy of the pandemic.
Following deteriorating pandemic-related developments, the Reserve Bank of India announced further measures to support liquidity provision to micro, small and medium firms, and loosened regulatory requirements on the provisioning for non-performing loans.
Yet on 7 June 2021, the World Bank projected India’s economy to grow at 8.3% in 2021 and 7.5% in 2022, even as its recovery is being hampered by an unprecedented second wave of the COVID-19, the largest outbreak in the world since the beginning of the deadly pandemic.
But it acknowledged that India’s recovery is being hampered by the largest outbreak of any country since the beginning of the pandemic.
In recent weeks, Indian businesses said they were cautious about the economic outlook.
“The pandemic will undermine consumption and investment as confidence remains depressed and balance sheets damaged,” added the bank.
“Growth in FY 2022/23 is expected to slow to 7.5%, reflecting lingering impacts of COVID-19 on household, corporate and bank balance sheets; possibly low levels of consumer confidence; and heightened uncertainty on job and income prospects,” it said.
The World Bank expects 6.5% GDP growth in 2023.
In 2020, the economy contracted by 7.3% compared to 4% growth in 2019. #economy #worldbank #investment #market /fiinews.com
