The gross domestic product (GDP) numbers for the first quarter (April-June 2020) of current financial year (FY 2020-21) is expected to be released by the Union Ministry of Statistics and Programme Implementation (Mospi) later on Monday.
According to experts, the country’s economy is expected to contract mainly because this quarter had seen more of the 68-day nationwide lockdown restrictions, which were enforced by the government from March 25 to check contain the spread of the coronavirus disease (Covid-19) outbreak.
This quarter is expected to see the worst performance of the economy since the publication of quarterly data in 1996.
According to the Economy Watch, the monthly report published by consultancy firm EY India, the GDP growth in the first quarter (Q1) is also likely to be the worst among the four quarters of FY21. This implies that the economy may perform better in the successive three quarters of the current fiscal year.
The economic crisis is not unique to India. Global economies are experiencing contraction due to the Covid-19 pandemic. The International Monetary Fund (IMF) has estimated a global contraction of 4.9% in 2020. The United Kingdom’s (UK) economy has reported a 21.7% year-on-year plunge in the June quarter.
Data showed that India’s GDP growth had slowed even before the Covid-19-induced lockdown restrictions. The growth rate in Q4 FY20 was 3.1%, the weakest point in the new data series that had started in 2012-2013. The FY20 real GDP growth is 4.2%, which is also the weakest in the series.
Ecowrap, a research report published by State Bank of India (SBI) on August 17, estimates Q1 FY21 GDP degrowth will be around -16.5%, though with the relevant caveats in the current uncertain scenario due to the pandemic.
