COVID-19 Lockdown to Come at a Heavy Economic Cost says Analysts
New Delhi: The three week lockdown in India will make the year 2020 an even worse year for the economy than the 2008 global financial crisis, according to analysts.
ING Group said in a note that the three-week nationwide lockdown will significantly dent India’s GDP growth, making this an even worse year for the economy than the 2008 global financial crisis. This demands a stronger policy response. Until then, the looming economic misery is poised to push US dollar/rupee above 80 in the coming days
The report said that the biggest whammy will be to private consumption, which accounts for 57 per cent of India’s GDP. With all non-essential consumption dropping virtually to zero for a week in the current quarter means year-on-year GDP growth plunges to just about 1 per cent, and with two weeks of a hit in the next quarter could push it to about -5 per cent.
“We would anticipate at least one more quarter of drag keeping growth in negative territory, beyond which the policy support and favourable base effects should drive recovery back to positive growth”, it said.
“While this shaves a full percentage point from the yearly growth in the current fiscal year (ends on 31 March 2020) to our estimated 4.0%, we have revised our forecast for the next financial year to 0.5% from 4.8%. This is a far cry from the government’s expectation of over 6% growth outlined in the FY2020-21 budget”, the report added.
According to a analysis ...
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