The government is scheduled to announce the gross domestic product (GDP) data for the January-March 2020 quarter today, giving a glimpse into the impact of coronavirus lockdown on the economy. The lockdown which began in the last seven days of March is expected to have taken a toll on economic growth, according to various brokerages. The economy is likely to have entered a recessionary phase with some agencies even estimating a contraction of over 5 per cent in FY21. According to a Reuters poll of economists, the Indian economy expanded by just 2.1 per cent in the fourth quarter of FY20, weakest in at least eight years.
The Reserve Bank of India (RBI) recently lowered India's growth forecast for the ongoing fiscal due to the coronavirus crisis. "The GDP growth in 2020-21 is expected to remain in the negative territory with some pick up in the second half," RBI Governor Shaktikanta Das had said last week.
Here are the expectations of some of the leading agencies:
India's GDP is estimated to have grown at 1.2 per cent in the fourth quarter of the last fiscal hit by economic shutdown due to the coronavirus crisis, SBI's Ecowrap said. The GDP growth is expected to be 4.2 per cent for FY20 and (-) 6.8 per cent for the fiscal year 2020-21, it added. The report also said that India's economy could contract by more than 40 per cent in the April-June quarter of 2020-21 owing to nearly two months of countrywide lockdown.
The GDP growth for Q4 is seen at 3.6 per cent with the headline number reducing to 4.7 per cent for the entire year, CARE Ratings said. The growth was 5.1 per cent for the first 9 months and would fall to 4.7 per cent, it added.
The GDP is expected to shrink 5 per cent in 2020 and remain negative for three consecutive quarters, Nomura said. "Our quarterly profile has growth faltering to 1.5 per cent y-o-y in Q1-2020 (January-March / Q4FY20), before contracting to 14.5 per cent in April-June, and then weakly recovering to -6 per cent in the July-September quarter and -1.5 per cent in the October-December 2020 period," it added.
According to CRISIL, India's GDP growth in Q4FY20 is expected to be 0.5 per cent. It estimated FY20 growth at 4 per cent. FY21 is likely to contract by 5 per cent, it added.
ICRA has estimated the GDP growth of 1.9 per cent in the January-March period. The entire fiscal year 2019-20 may grow at 4.3 per cent, it said.
Fitch Ratings projected India's GDP to contract 5 per cent in FY21 in contrast to an earlier forecast of growth of 0.8 per cent. "The biggest contribution to the downward revision in global GDP for 2020 comes from EM (emerging markets) excluding China, where we now see GDP falling by 5 per cent in India and Russia and by 6-7 per cent in Brazil and Mexico," Fitch said.