Covid-19 impact: IMF projects Indian economy to contract by 4.5% in FY21

In comparison, emerging markets and developing countries group saw a 2 percentage reduction in outlook while the world outlook was only cut by 1.9 percentage points

The International Monetary Fund (IMF) has warned that the Indian economy faces an even deeper downturn than what it had projected in April as the country grapples with the Covid-19 pandemic. It has projected a sharp contraction of 4.5 per cent in FY21, a steep drop from its April forecast of a 1.9 per cent expansion, calling it a "historic low" for India.

In fact, India faced the sharpest cut in the outlook — a 6.4-percentage point revision due to a more severe fallout of the pandemic than anticipated. In comparison, emerging markets (EMs) and developing countries saw a 2-percentage point