The spiked ball has hit India’s economy hard, sending it tumbling to the sixth rank on IMF’s ranking of top ten economies of the world. The country had been holding the fifth position since 2019 and now it looks like that cannot be regained for another couple of years. The global organisation has said that the Indian economy will shrink by 8% in 2020 and grow by 12.5% in 2021. But growth for the current fiscal is suspect considering the disruption caused by the second wave of COVID-19.
The outbreak of the COVID-19 pandemic led to strict lockdowns across the globe, and it took a big bite out of every economy in the world. While India dropped a rank, Brazil has dropped off the ranking altogether; it contracted by 4.1% in 2020 and is expected to grow by 3.7% in 2021, but will not make it back to the list till 2026. The UK’s economy saw the sharpest decline at 10% in 2020 and recovered well with a growth of 5.3% in 2021.
Among the countries that weathered the health crisis well is South Korea, which managed to control the spread of the virus with early adoption of testing, contact tracing and social distancing. Its economy shrank only by 1% in 2020 and is expected to grow 3.6% in 2021. China became the only major economy to record growth in the pandemic year, at 2.3%, even though its economy contracted by 6.8% in the first quarter.
Back in India, the shallow recovery is under threat from the second wave of infections, with the country recording over 300,000 new cases a day. It has overtaken Brazil to become the second-most affected country in the world. Prime Minister Narendra Modi recently announced that states can impose a lockdown as the last resort but then, if the entire country opts to down shutters, India’s GDP’s growth will surely be stunted.
With the arrival of vaccines and improving distribution, recovery of economies had been faster than anticipated. While most countries have braved the second wave of the virus and got back on track, India’s utter lack of preparedness in terms of vaccine delivery and medical assistance has put lives at colossal risk, and economic growth seems a distant goal.