Contrary to expectations, December quarter was not the one that saw the end of slowdown blues. But if government projections are to be believed, March quarter is going to fare even worse. Accounting for Centre's GDP projections for the financial year 2019-20, it is expecting quarterly GDP to slip further down in the last quarter to 4.6 per cent.
Ministry of Statistics and Programme Implementation announced that India's Gross Domestic Product (GDP) grew at 4.7 per cent during third quarter of FY20. It also revised the GDP figures for first and second quarters of this fiscal to 5.6 and 5.1, respectively. Moreover, the government stated that it expects GDP growth during the entire financial year 2019-20 to be at 5 per cent. This pegs GDP estimates for the fourth quarter of FY20 to 4.6 per cent.
In other words, as things stand, government expects economic slowdown to continue for another quarter.
This pessimism might be a product of the coronavirus outbreak that has the world on tenterhooks. So far, more than 83,600 patients have been identified around the globe, whereas 2,858 people have lost their lives to the epidemic. World Health Organisation has heightened its risk assessment of COVID-19, the official name for novel coronavirus, to "very high" at global level. Since the virus was detected by the end of December 2019, its impact will only be clear in the March quarter.
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Analysts have warned against the impact of coronavirus on global and Indian economy. Analysis shows that the deadly virus can cost global economy $1.1 trillion, which is 1.3 per cent of world's GDP, if it turns into a pandemic. Even if coronavirus remains contained within Asia, it can wipe out $400 billion from the global GDP.
Industries across the board in China, the epicentre of this crisis, have suffered on account of prolonged closures and limited workforce in the wake of coronavirus outbreak, affecting global supply chains in turn. In India too, industries like pharmaceuticals, automobile, electronics and more are facing a dearth of raw materials due to this.
Finance Minister Nirmala Sitharaman has assured that the coronavirus outbreak will not have any impact on the Indian economy at least in the short-term. After the GDP figures for December quarter were declared Economic Affairs Secretary Atanu Chakraborty had said that the economy has bottomed out and there is an uptick despite international headwinds. On the impact of coronavirus on Indian economy, Chakraborty had said that it was an "unfolding story".
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