The World Bank has said that India’s growth rate is expected to drop to 6 per cent as the economy battles a recession. The growth rate stood at 6.9 per cent in 2018-2019.
The World Bank though said that GDP growth rate was likely to slowly recover to 6.9 per cent in 2021 and 7.2 per cent in 2022.
The ‘South Asia Economic Focus’ report said growth will increase as rural demand benefits from the effects of income support schemes.
In the quarter ended June, India’s GDP growth slowed down to 5%. This is the slowest pace in which the economy has expanded since March 2013, when the growth rate was 4.7%.
The slowing down of household, which also affected other sectors, demand was one of the major factors for the decline.
The World Bank noted that growth dropped for the second successive year and pointed out to the widening current account deficit.
India’s current account deficit, a parameter which reflects the trade balance, was 2.1 per cent of the GDP in 2018-19 from the 1.8 per cent a year earlier.
The industrial output figures for August showed that output fell by 1.1%, it had seen a growth of 4.2% a month ago.
Earlier this month, data showed that the output of eight core sector industries that constitute about 40% of Index of industrial production recorded a 0.5% decline in August.
The auto industry is experiencing a hard time. In September, car sales slumped to 23.7%, the eleventh straight month of decline.