Sydney: Goldman Sachs expects India will experience its deepest recession ever after a poor run of data underscored the damaging economic impact of lockdowns in the world’s second-most populous nation.
Gross domestic product will contract by an annualized 45% in the second quarter from the prior three months, compared with Goldman’s previous forecast of a 20% slump. A stronger rebound of 20% is now seen for the third quarter, while projections for the fourth quarter and first of next year are unchanged at 14% and 6.5%.
Those estimates imply that real GDP will fall by 5% in the 2021 fiscal year, which would be deeper than any other recession India has ever experienced, Goldman economists Prachi Mishra and Andrew Tilton wrote in a note dated May 17.
India’s government has extended its nationwide lockdown until May 31, while further easing restrictions in certain sectors to boost economic activity, as coronavirus cases escalate across the country. The announcement followed Finance Minister Nirmala Sitharaman’s fifth briefing in as many days, in which she outlined details of the country’s $265 billion virus rescue package, which is equivalent to 10% of India’s GDP.
“There have been a series of structural reform announcements across several sectors over the past few days,” the Goldman economists wrote. “These reforms are more medium-term in nature, and we therefore do not expect these to have an immediate impact on reviving growth. We will continue to monitor their implementation to gauge their effect on the medium-term outlook.”
Infections are surging across the South Asian nation of 1.3 billion people, with more than 91,300 infections, including 2,897 deaths as of Sunday, according to data from Johns Hopkins University. – Bloomberg
Also read: Modi govt’s package is worth Rs 21 lakh crore, but fiscal hit will only be Rs 2 lakh crore
Mere Dost drama to abhi shuru hua hai. Aagey aagey dekho kya kya hota hai is desh mein. Andher nagri chopat raja.
Jai ho Bharat mata ki.
What is this drama going on in the country in the name of packages, free food, free ration and migrants? Nation and people have forgotten the China Corona Virus which is almost touching 1 lakh infection and crossed the 3 thousands death mark. The nation should forget about the economy, economists, reforms, disinvestment, out-sourcing, PPE(Public Private Partnership model ), privatization. They are also big disaster for the nation and the people. So far they have done no good neither for the economy nor for the people. The governments must stop all the reforms, disinvestment, out-sourcing, PPE (Public Private Partnership) model, privatization, sale of government PSUs and government departments, etc and pay complete attention to wipe out the China Corona virus. Opposition leaders, NGOs, left wingers, journalists, activists etc are dictating the agenda to the government. India is inching towards a big disaster.