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 The Indian economy is likely to witness a sharper contraction in the current fiscal as the Global Economic Conditions Survey shows that it is likely to contract by around 10 per cent, higher than the official estimates.

Official estimates project a contraction of around 7 per cent in FY21.

The survey, conducted by the Association of Chartered Certified Accountants and the Institute of Management Accountants, noted that South Asia has been hit hard by the pandemic as economies reliant on services and tourism are prevalent in the region.

However, there are signs of recovery with a rise in all the main activity indicators in the region, it added.

"Any growth revival will be fragile and subject to avoiding renewed Covid infections," it said.

The Q4 Global Economic Conditions Survey (GECS) points to little change in confidence but continued modest global economic recovery early in 2021.

However, it said that polling for the survey was completed by December 8, 2020. Since then, many countries have suffered increased Covid-19 infection rates, prompting governments to re-impose restrictions including national lockdowns.

"Hence global economic prospects early in 2021 will have deteriorated since the Q4 survey was conducted. At the same time, there has been progress on the approval of vaccines, raising hopes of a permanent improvement in economic conditions later this year," it said.