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India Gets Biggest GDP Downgrade by IMF as Lockdown Hurts

  • IMF now sees 4.5% contraction versus 1.9% growth previously
  • Fiscal deficit set to soar, public debt to rise to 84% of GDP
Pedestrians walk along a near-empty street near Crawford Market in Mumbai.

Pedestrians walk along a near-empty street near Crawford Market in Mumbai.

Photographer: Dhiraj Singh/Bloomberg

The International Monetary Fund’s forecast for India’s economy swung from expansion to contraction, marking the sharpest downgrade in projections of the world’s main economies.

The Washington-based lender now sees India’s gross domestic product declining 4.5% in the fiscal year through March 2021, compared with an April projection of 1.9% growth. The 6.4 percentage-point downgrade in the forecast is due to “a longer period of lockdown and slower recovery than anticipated in April,” the IMF said in an update of its World Economic Outlook report, released Wednesday in Washington.