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Opinion
Mihir Sharma

India’s Economy Is Ailing From More than Covid-19

The virus is only going to make a growth slowdown caused by declining investment even worse. 

Growth is headed for a fall. 

Growth is headed for a fall. 

Photographer: Uma Shankar Mishra/AFP/Getty Images

According to the International Monetary Fund, India will be the large economy worst hit by the Covid-19 pandemic. The Fund now says that Indian GDP in the ongoing financial year, which began in March 2020, will contract by 4.5%. Just a few weeks ago, it had been predicting 2% growth for the year.

The IMF’s projection is by and large in line with estimates from investment banks and other international organizations. Indian officials have been reticent about their own estimates. This is not surprising: India’s economy has not contracted since 1979. For the government, this is uncharted territory.