Indian economy is estimated to contract by 9.6 per cent in calendar year 2020. (Representational)
India's economy is estimated to contract by 9.6 per cent in 2020, as lockdowns and other containment efforts to control COVID-19 slashed domestic consumption without halting the spread of the disease, and the growth is expected to recover and grow at 7.3 per cent in 2021, according to a UN report on Monday.
In 2020, the world economy shrank by 4.3 per cent, over two and half times more than during the global financial crisis of 2009. The modest recovery of 4.7 per cent expected in 2021 would barely offset the losses of 2020, said the latest World Economic Situation and Prospects released by the UN.
In South Asia, the pandemic severely impacted most economies in the region, dragging down average GDP by -8.9 per cent in 2020. India, in particular, suffered its largest economic decline in history, with output falling by nearly 10 per cent in 2020.
"India's economic growth has fallen from 4.7 per cent in 2019 to -9.6 per cent in 2020, as lockdowns and other containment efforts slashed domestic consumption without halting the spread of the disease, despite drastic fiscal and monetary stimulus," the report said.
UN Secretary-General Antonio Guterres said the world is "facing the worst health and economic crisis in 90 years. As we mourn the growing death count, we must remember that the choices we make now will determine our collective future."
"Let's invest in an inclusive and sustainable future driven by smart policies, impactful investments, and a strong and effective multilateral system that places people at the heart of all socio-economic efforts," he said.
The Indian economy, which grew at 4.7 per cent in 2019, is estimated to contract by 9.6 per cent in calendar year 2020. The report said that the economy is forecast to recover and clock a 7.3 per cent growth in 2021 but slow down to 5.9 per cent in 2022.
The report said that the COVID-19 crisis has wreaked havoc on labour markets in the developing world.
By mid-2020, unemployment rates had quickly escalated to record highs: 27 per cent in Nigeria, 23 per cent in India, 21 per cent in Colombia, 17 per cent in the Philippines and above 13 per cent in Argentina, Brazil, Chile, Saudi Arabia and Turkey.