'We moved from 50% to 90% of normalcy in about three-and-a-half, four months. But the 90% to 100% move will happen over the next six to seven months.'
The first quarter GDP contraction compares with 3.1 per cent growth in the preceding January-March quarter and 5.2 per cent expansion in the same period a year back.
Q1 numbers of GDP for the financial year 2020-21 have shown unprecedented contraction, never seen in the last 40 years. As experts say that the Covid pandemic fallout on Indian economy may not be over yet, TK Arun of The Economic Times does an impact analysis and lists out the possible options for GOI in times to come.Unprecedented Q1 GDP contraction: Implications and challenges ahead for India
The agency, however, expects India's gross domestic product (GDP) to rebound and grow at 9.9 per cent year-on-year in FY22 mainly due to the weak base of FY21.
Attributing the 23.9 per cent contraction in GDP in April-June to the coronavirus lockdown, Chief Economic Adviser K V Subramanian on Monday said the country will witness better performance in the subsequent quarters, aided by a 'V-shaped' recovery in various sectors.GDP growth decline due to intense lockdown, expect a V-shape recovery: CEA KV Subramanian
Terming the 23.9 per cent fall in the economic growth in June quarter alarming, former Reserve Bank Governor Raghuram Rajan has said bureaucracy should come out of complacency and take meaningful action. Emphasising on the importance of government relief or support in the given scenario, he pointed out that it is "meagre" so far.Raghuram Rajan raises concerns on India's GDP growth data, says numbers should alarm us all
The Infy founder also pitched for developing a new system that should allow every player in every sector of the country's economy to operate at full steam with suitable precautions.
As per the NSO, gross value added (GVA) came in at -22.8 per cent. It is the worst economic contraction on record.
It further said India fares the worst in its Asia recovery scorecard, implying that the country will likely take the longest among major economies to converge to its pre-coronavirus growth level. .
The Japanese brokerage firm said no quarter would see positive growth in the ongoing fiscal, resulting in -6.1% gross domestic product (GDP) growth rate for FY21.
The Covid-19 crisis means India’s GDP will crash this year by anywhere from 5% to 10%. Government revenues are collapsing, while emergency relief spending will vastly exceed any spending cuts or new taxes on oil. So, the fiscal deficits of the central and state governments will skyrocket into double digits.
The real question is how much better have we got in May, June, July and August? Are we atpre-Covid levels? Or is it that though we are better than in April 2020, we have a long way to go before reaching economic and business normalcy? The answer is clear. Yes, we are doing better than April 2020. But normalcy is along and arduous road ahead.
Asian Development Bank, Nomura, as well as S&P have revised India's GDP forecasts for FY2020-21 to minus nine per cent. Earlier ADB had expected a 4% contraction for the same period. Last week, two other global rating agencies Moody's and Fitch projected Indian economy to contract 11.5 per cent and 10.5 per cent respectively in the current fiscal. However, Goldman Sachs has estimated the contraction at 14.8 per cent. Domestic agencies - India Ratings and Research projected contraction at 11.8 per cent, while Crisil estimated contraction at 9 per cent. The latest forecasts have come amid massive 23.9% contraction in the June quarter.
Covid-19 pandemic will curtail India’s GDP growth in FY21, first in four decades: Kumar Mangalam Birla
Given the fog of uncertainty all around, it is hard to be prescient in these times, Birla said. A stringent national lockdown to slow the spread of the pandemic started in the last week of FY2020 and remained active to varying degrees in different geographies through most of the first quarter of 2020-21.
The decline in GDP growth by around 8 per cent would also be associated with a decline in the gross fixed capital formation, the agency said.
Ficci has projected the country's annual median GDP growth for 2020-21 at (-) 4.5 per cent.
The latest estimates place year-on-year decline in GDP during April-June quarter at 23.9%. What this means is that if the economy were to shrink by this same percentage in the remaining three quarters, growth rate in 2020-21 would turn out to be –23.9%.
The drastic downward revision for both the firms, which was over twice the earlier estimates of -5% by Fitch and -5.3% by Ind-Ra, was due to the worse-than-expected April-June quarter performance of -23.9%.
After the Japanese research firm Nomura finding some green shoots of rein September, now American investment bank Goldman Sachs, is seeing a full-bound recovery by 2021. Even ratings firm India Ratings has forecast a revival in FY'22.
15th finance commission to submit its report by October end, panel might treat FY21 as zero year: NK Singh
The economic advisory panel of the 15th finance commission on Friday suggested providing a range rather than a number as fiscal deficit targets for both the Centre and states in a report, the commission's chairman N K Singh said on Friday. Singh said the 15th Finance Commission will submit its four volume final report by October-end.15th finance commission to submit its report by October end, panel might treat FY21 as zero year: NK Singh
Indian economy is likely to see a V-shaped recovery from the record contraction of 23.9% in the April-June quarter, on the back of higher government spending at a time when the consumption demand is likely to remain tepid till a vaccine for coronavirus is ascertained, the finance ministry said in its monthly economic report for August. India witnessing V-shaped recovery, but uncertainty to impact demand: Finance Ministry
The Reserve Bank of India (RBI) on Thursday said inflation is expected to be at elevated levels during the second quarter but may ease in the second half of the current fiscal year. On the economic growth, RBI Governor Shaktikanta Das said that India's real gross domestic product will contract in the first half of FY21 as well as full financial year.Elevated Inflation in Q2, negative real GDP growth in FY21: RBI’s MPC shares outlook for economy
The critical issue in the next 12 to 18 months is the extent of the damage done to the loan portfolios of banks and NBFCs, in particular their consumer loan portfolios.
While the GDP crash has been steep and has been triggered by the political decision of imposing lockdowns, the recovery path is going to be gradual, says Swaminathan Aiyar of The Economic Times. He also shares his thoughts on what could be the critical factors that could help induce growth, in this series of Swami Speaks. Watch!Political decision triggered steep crash in GDP but recovery will be slow: Swaminathan Aiyar
Recreating growth in the medium term is likely to come from sectoral strategies across 10 key sectors constituting most of India’s GDP. Dormant resources — both of enterprises and governments — must be put into service, requiring a special focus on balance sheets.
Stating that the developments arrested the nascent recovery that had set in during May-June 2020, the latest estimate took the agency to the lower end of the spectrum of growth expectations for the economy. In May, ICRA had said the country would see a 5% contraction in FY21.
However, they believe the rural recovery is unlikely to support such pace in subsequent quarters as overall, the per capita monthly expenditure in urban areas is at least 1.8 times of rural areas and rural wage growth in real terms might still be negative.
June was the fourth successive month of contraction. Factory output declined 57.6% in April and 33.9% in May, months during which a lockdown was in place to curb the spread of Covid-19.
India could witness a negative growth of 4.5% in 2020 fiscal, but could grow at a healthy growth rate of 6.3% in 2021 fiscal, Country Risk & Global Outlook report by Dun & Bradstreet released in August said.
In a televised address, RBI Governor Shaktikanta Das said the global economy is heading into recession. He also said inflation outlook is "highly uncertain".
Last year the target was a range of between 6 per cent and 6.5 per cent.
India's economic growth slipped to 3.1 per cent in the January-March quarter of 2019-20 showing impact of COVID-19 pandemic. The gross domestic product (GDP) had expanded by 5.7 per cent in the corresponding quarter of 2018-19, according to data released by the National Statistical Office (NSO) on Friday. In 2019-20, the Indian economy grew by 4.2 per cent against 6.1 per cent expansion in 2018-19.India GDP growth dips to 3.1% in Jan-Mar; 4.2% in 2019-20
‘We are forecasting real GDP growth to come back up to 3.5% in fiscal 22’
India's ability and willingness to repay debt is gold standard, CEA said making a case for ratings upgrade.
India's GDP could marginally expand 1.5% or even contract 0.9% in this financial year, the Confederation of Indian Industry (CII) said in a report and suggested several measures to address the economic challenges posed by the Covid-19 pandemic.
Asia's third-largest economy began slowing last year, but a countrywide lockdown implemented by Prime Minister Narendra Modi on March 25 halted economic activity completely.
The core sector contracted by a record 38% in April as the lockdown hit all eight infrastructure sectors, according to data released separately. Cement output fell 86% while fertilisers and crude oil shrank 4.5% and 6.4%, respectively, in April.
The govt has revised growth for the first three quarters of FY20 to 5.2% in Q1, 4.4% in Q2 and 4.1% in Q3.
“The ways and means for this additional financing needs to be identified. At the same time, it is crucial to make sure that the budget allocations align with SDG priorities,” the Aayog said.
The country's GDP growth is likely to be at 3.6 per cent in January-March 2020, Crisil has said.
Indian economy may expand by around 5% in the next financial year,ex-RBI guv Duvvuri Subbarao said.
Dubai, the Middle East's trade and tourism hub, has been hit hard by coronavirus-containment measures and is set for an economic contraction almost four times worse than during the global financial crisis in 2009, S&P said.
The agency says prospects of further reforms to support business have diminished.
In a note on Monday, Ind-Ra revised its economic growth estimate for the country from its forecast of 3.6 per cent published on March 30, 2020 to to 1.9 per cent.
The slump may have reached its bottom with India's growth expanding at 4.7% in the quarter ended December 31, compared to the previous quarter. The economy had grown at an over six-year low of 4.5% in the previous quarter. In line with expectations, India's GDP growth rate bottomed out during the third quarter of the current fiscal and inched up to 4.7 per cent from 4.5 per cent reported for the previous quarter. India’s GDP growth in full FY19 had stood at 6.8 per cent.India's Q3 FY20 GDP growth inches up at 4.7% vs 4.5% in previous quarter
Moody's had, in November 2019, downgraded India's outlook to negative from stable on concerns of lower economic growth. The agency had, however, affirmed country's 'Baa2' rating. In its update to the November forecast released on Friday, the agency said India's credit profile is supported by its large and diverse economy, and stable domestic financing base.
Earnings estimates for FY2021-22 have already seen sharp cuts in recent weeks.
SBI’s economics wing expects the inequality gap in India to narrow down post Covid-19.
The IMF on Tuesday projected a GDP growth of 1.9 per cent for India in 2020.
The GDP growth was below a revised - and greatly increased - 5.1% growth rate for the previous quarter.
At an event to mark the launch of auction of 41 coal blocks for commercial mining purposes, Modi said that the government targets to gasify 100 million tonnes coal by 2030 through four projects entitling an investment of Rs 20,000 crore.
Since the outbreak of the crisis, which has seen the country being put under a 40-day lockdown, watchers have been warning about a heavy toll on the economy, with some analysts also expecting the GDP to contract in 2020-21.
In the baseline scenario, the Gross Domestic Product (GDP) is expected to grow at just 0.6 per cent on an annual basis as economic activity is expected to remain constrained due to continuing restrictions on the free movement of goods and people beyond the lockdown period.
Fitch Solutions on Monday cut India's economic growth forecast for the financial year 2020-21 to 1.8 per cent saying private consumption is likely to contract due to large-scale loss of income in the face of worsening domestic outbreak of COVID-19.
After a contraction in the current financial year, India's economy is forecast to bounce back with a sharp growth rate of 9.5 per cent next year provided it avoids further deterioration in financial sector health, Fitch Ratings said on Wednesday. The coronavirus pandemic will lead to shrinking of the already slowing economy in 2020-21 that started in April. Fitch Ratings forecast a 5 per cent contraction in the GDP in the ongoing financial year.Indian economy to bounce back in next fiscal with sharp growth rate of 9.5%: Fitch Ratings
The National Statistics Office has forecast India’s GDP growth to slip to an 11-year low of 5% in FY20. Manufacturing growth in 2019-20 is seen at 2% year on year, which is a 15-year low, as against 6.9% growth in FY19. Construction growth is seen slipping to a six-year low of 3.2% in FY20 from 8.7% in the last fiscal.
Liberal democracies like Australia, Britain and the US have, on an average, around 4% of GDP contribution from the media and entertainment (M&E) sector. In India, M&E contributes just about 1%. Given the fragmented nature of the M&E sector, data is hard to come by.
The Budget expects nominal GDP growth of 10 per cent in the next fiscal , followed by 12.6 per cent and 12.8 per cent in FY22 and FY23, respectively. Even before the significant slowing in economic expansion in 2019, nominal GDP growth had averaged about 11 per cent over the five years from 2014 to 2018.
The Economic Survey, released a day before Finance Minister Nirmala Sitharaman presented Union Budget for 2020-21 on February 1, had projected a GDP growth of 6-6.5 per cent, up from 5 per cent estimate for 2019-20.
Chief Economic Adviser K V Subramanian said the Indian economy has bottomed out and it will see an uptick from here on.
It is for the second consecutive time that NSO's GDP estimate is significantly lower than the projection made in the survey prepared by the finance ministry.
"Real GDP or GDP at constant (2011-12) prices for the years 2018-19 and 2017-18 stand at Rs 139.81 lakh crore and Rs 131.75 lakh crore, respectively, showing growth of 6.1 per cent during 2018-19 and 7.0 per cent during 2017-18," the National Statistical Office said in revised national account data released on Friday.
The Economic Survey has ruled out any misestimation of India’s gross domestic product (GDP) in the wake of the recent debate about possible overestimation of growth rates following the revision in methodology in 2011.
GoI has sedulously avoided direct disbursements to wage labourers who have no jobs and no recourse.
‘The economic policy response is still lacking to some extent’
Fitch Solutions joins a chorus of international agencies that have made a similar cut in growth estimates in recent days. Standard and Poor's (S&P) last week cut its estimate for India's GDP growth in 2020-21 to 5.2 per cent from its earlier estimate of 6.5 per cent. Fitch Ratings slashed its growth forecast from 5.6 per cent to 5.1 per cent for 2020-21.
India has seen a recession only thrice, in fiscals 1958, 1966 and 1980.
‘The quantum of loss that will percolate down to the financial system is unknown at this stage’
According to the SBI's research report – Ecowrap - the gross domestic product (GDP) growth is likely to be 4.2 per cent for FY20 and (-) 6.8 per cent for FY21. The fourth quarter GDP growth number for FY20 will be announced by the National Statistical Office (NSO) on May 29.
MPC will continue with the accommodative stance as long as it is necessary, says RBI.
In April-June, we are expecting a contraction of 5%, says Deutsche Bank's Chief India Economist.
While Governor Shaktikanta Das acknowledged that GDP growth would likely remain in the negative territory in 2020-21, he also announced an extension of the moratorium on payment of installments to all term loans till August 31.
The real GDP growth will slow to under 2.5 per cent for the June 2019 quarter, from the estimate of 4 per cent for March, it said.
The report estimated sharper de-growth in the first and second quarters of FY21 at -25% and -2.1% respectively, down from a range of 16%-20% contraction in Q1 and 2.1% growth in Q2 before. With two consecutive quarters of contraction, it implied the economy was in recession.
"India's response to the COVID-19 crisis lacks major or innovative near-term fiscal support, and fails to provide the much-needed impetus to stimulate growth and kick-start economic growth," Credit Suisse Wealth Management's Head (India Equity Research), Jitendra Gohil, said.
While Nomura has forecast recession-three consecutive quarters of recession, Goldman Sachs, Bank of America, UBS and HSBC have been less harsh with economy contraction forecast ranging from 0.1 per cent and 3.5 per cent.
"The package may fall short of mitigating the near-term challenges for some businesses, but it is better designed to improve India's medium-term growth potential and attract long-term risk capital," analysts at the Japanese brokerage Nomura said. They also added that there are no "silver bullets" in the package.
India’s economic growth slipped to a 26-quarter low of 4.5% in July-September from 5% in the first quarter. The statistics office lowered the FY19 GDP growth rate to 6.1% from the provisional estimate of 6.8% and has forecast 5% growth in FY20, its slowest pace in 11 years.
FM Nirmala Sitharaman Sunday announced the fifth and final tranche of the Rs 20 lakh crore relief package. Experts agreed that most of the expenditure was contingent and the measures were largely regulatory and the government’s immediate additional expenditure would be minimal.
Gross domestic product is estimated to grow 5.0% in FY20, slower than the 6.8% growth in FY19.
The large-scale manufacturing sector in the country witnessed a decline of 5.9 per cent in Q1-FY20 on YoY basis. This contraction was broad-based, as construction-allied industries, petroleum and automobile industries continued on downward path.
Annual gross domestic product growth likely rose to 4.7% in the last quarter of 2019 from 4.5% the previous quarter, when the growth rate appears to have bottomed out, a Feb. 18-24 Reuters poll found. About 90% of economists in the poll forecast growth for the October-December quarter at 5% or below.
The brokerage's economist Tanvee Gupta Jain said even though there are only over 50 positive coronavirus cases in India so far, the fear and uncertainty over its impact could worsen near-term consumer sentiment and hit domestic demand. The brokerage also cut its FY20 growth estimate marginally to 4.8 per cent.
India’s limited presence in global supply chain a blessing in disguise.
Even as India slowly starts going back to work, the country has reported just shy of 10,000 cases in the last three days, with 3,380 of them being reported in the last 24 hours.
According to the latest OECD forecasts, India's real GDP growth is expected at 5.1 per cent.
Fitch said growth will gradually recover to 5.6 per cent in FY21 and 6.5 per cent in the following year.
After keeping the country under a 40-day lockdown to arrest the spread of coronavirus, the government extended the lockdown till May 17 with a slew of relaxations to the unaffected areas in order to kick-start economic activity.
The FM said "steadiness" in economy is a good sign, soon after the official data showed Q3 GDP at 4.7%.
India's Q3 GDP growth rate stood at 4.7 per cent, official data showed on Friday.
Growth could be hit as demand has cooled with slow employment growth impacting consumption, co expects 6.6% for ’20 and 6.7% in ’21.
The GDP growth will stay flat at 4.5 per cent in the October-December 2019, economists at SBI have said.
Moody's expects economic growth to pick up in 2020 and 2021 to 6.6 per cent and 6.7 per cent respectively.
Mukherjee, who also served as the finance minister in the UPA government, further said there is nothing wrong in public sector banks needing capital infusion. "I am not worried over the slow rate of GDP growth in the country. Certain things happening will have its impact," he said while addressing an event at the Indian Statistical Institute (ISI).
"India's growth is now seen at a slower 5.1 per cent in fiscal year 2019-20 as the foundering of a major non-banking financial company in 2018 led to a rise in risk aversion in the financial sector and a credit crunch. Also, consumption was affected by slow job growth and rural distress aggravated by a poor harvest," Asian Development Bank said.
A granular look reveals the disarray: All lead indicators point to a dismal manufacturing growth.
As India completes a month under lockdown, the country reported 21,700 cases, with 1400 cases being added in the last 24 hours. Testing in the country has gone up 33 times in the last 30 days, the govt said today.
Former prime minister Manmohan Singh said on Friday the GDP growth rate of 4.5 per cent was unacceptable and worrisome, and urged his successor Narendra Modi to set aside "deep-rooted suspicion" of society and nurse India back to harmonious, mutually trustworthy society that can help the economy soar.4.5% GDP growth rate unacceptable, worrisome: Manmohan Singh
Fitch has slashed India's growth projections to 0.8 per cent in the current fiscal.
MCX Gold (Feb) futures were up 0.17 per cent to Rs 37,829.