According to the latest report published by the World Bank on Monday, India’s economy is seen contracting 3.2% in FY21, in the face of the economic and travel lockdowns imposed due to the coronavirus pandemic.
The contraction will largely materialize in the year to 31 March and the Indian economy will recover to grow at 3.1% in the following year.
“Spillovers from contracting global growth and balance sheet stress in the financial sector will also adversely impact activity, despite some support from fiscal stimulus and continued monetary policy easing.”
“The swift and massive shock of the coronavirus pandemic and shutdown measures to contain it will lead to a contraction of the global economy by 5.2% in 2020.”
“This is a deeply sobering outlook, with the crisis likely to leave long-lasting scars and pose major global challenges.”
USD/INR drops back to 75.50
USD/INR quickly faded a spike to weekly highs of 75.73 and dropped back to the familiar range around mid-75s.
The Indian rupee (INR) seems largely unaffected by the World Bank forecasts.