ndia's GDP is projected to grow at 4.8 percent in the financial year 2020-21, as per the 'Economic and Social Survey of Asia and the Pacific (ESCAP) 2020: Towards sustainable economies' report of the United Nations. The prediction was made on the basis of data available up to March 10, 2020.
India's GDP for 2019-20 was projected at 5 percent and the growth is projected to slowdown in 2020-21 to 4.8 percent. The report predicts the GDP growth at 5.1 percent for 2021-22.
India's GDP has declined significantly in the past few months, owing to factors such as decline in demand in real estate, automobile, and aviation sectors and narrowing credit limits. The GDP was at its 7 years low in July-September 2019 quarter at 4.5 percent. Falling income growth and increasing unemployment also contributed to slowdown in the growth rate.
Growth projected in Economic Survey 2019-20
As per the Economic Survey 2019-20, which was presented a day before the Union Budget 2020-21, the GDP was estimated to grow at 6-6.5 percent in the current fiscal year from 5 percent in 2019-20.
Impact of COVID-19 pandemic on economy of the region
The UN ESCAP 2020 report states that the outbreak of COVID-19 pandemic could have an adverse impact on the economy of the Asia and Pacific region due to decelerated cross-border tourism, trade and other financial linkages.
The pandemic of novel Coronavirus is spreading rapidly with no signs of decline in cases as on March 31, 2020. The COVID-19 was first reported in Wuhan city of China and subsequently has spread across the globe.
Despite several measures have been taken to contain the spread of coronavirus such as lockdown, quarantine and others, the pandemic has already impacted the economies of the region as well as global economies.
As a result of COVID-19, the GDP of Asia-Pacific region could decline by 0.6-0.8 percent due to trade links as per the ESCAP report.
Slowdown in Global Economy
In FY 2019-20, the global economy grew at its slowest pace since 2008 at 2.3 percent, a decline from 3 percent GDP in 2018. The global economy is expected to slow down further in 2020-21 with a growth of 2.0 percent in 2020.
Furthermore, the slowdown in developing economies of the Asia-Pacific region was led by large economies including India, China and Russia.
Solution suggested by ESCAP report
In order to overcome the impact of the COVID-19 on global economy, the global economies including the countries of Asia-Pacific region should come together and strengthen coordination and cooperation.