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GLOBAL ECONOMY TO CONTRACT 4.4%

Focus: GS-III Indian Economy

Why in news?

Fitch Ratings projected global GDP to contract 4.4% in the current year, but revised upwards China’s growth estimate to 2.7% for 2020.

Details

Fitch has slashed India’s growth projection to (-)10.5% from (-)5% estimated earlier after official data released last week showed the April-June 2020 quarter GDP contracted by 23.9%.

‘Limited fiscal support’

  • The report said – India imposed one of the most stringent lockdowns worldwide in 2Q20 (April-June) and domestic demand fell massively. Limited fiscal support, fragilities in the financial system, and a continued rise in virus cases hamper a rapid normalisation in activity.
  • It projected the U.S. GDP to contract 4.6% in 2020, less than the 5.6% decline it had forecast in June.
  • Fitch revised China’s GDP growth forecast to 2.7%, from 1.2% in June, following the stronger-than-expected April-June outturn and continuing recoveries in investment, housing and exports.

-Source: The Hindu

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