The COVID-19 lockdown has worse impacted the Indian economy which was already limping with a decline in consumer demand and investment. However, the data to be released on Monday will likely show that the economy has suffered its largest quarterly slump ever recorded.
A poll conducted by Reuters has recorded economists predicting India’s GDP will contract by 18.3 % in the June quarter. There was a 3.1% growth in the previous quarter. It is touted as the worst performance in the last eight years.
Economists have also predicted a further contraction of 8.1 % and 1.0 % in the quarters ending September and December. Hence, the chances of an economic recovery this year is ruled out.
India GDP Data:
The National Statistical Office (NSO) is expected to put out this quarter’s numbers today at 5:30 pm.
The Q1 (April-June, FY21) GDP figures would highlight the impact of the measures the central government announced to resurrect the economy amid the pandemic and slowdown.
It is expected that for the April-June quarter of FY21, a contraction in output is anticipated. According to Goldman Sachs, it is likely that the Indian economy would shrink by 45% on an annualized basis this quarter. The 5% GDP slump would be the worst in the last 40 years.
On the other hand, the projection by the World Bank shows a 3.2% contraction, the IMF pegs it at 4.5% while the Asian Development Bank at 4%. The surge in the COVID-19 cases since the reopening in May has also come to hit it very badly.
India is the third worst-hit country in the world behind Brazil and the US, with 3.17 million COVID-19 cases so far. Respective states have also imposed lockdown considering the worsening coronavirus situation. It is not entirely the COVID-19 pandemic to blame for this economic slump. Even before the pandemic, India’s economy, which is the third-largest in Asia was witnessing a downturn.