India's economy seen slowing rapidly in March quarter, with worse to come

India's economy seen slowing rapidly in March quarter, with worse to come”

In the October to December 2019 quarter, the country's economic growth stood at 4.7% - a seven-year low.

The GDP growth rate for FY20 is estimated to be 4.2%, as compared to 6.1% in FY19.

All in all, the economy is still expected to shrink between 5 and 6 percent for the year with expectations that double-digit unemployment will continue into 2021.

4th Quarter Data: Offering the first glimpse of the extent to which the Covid-19 outbreak and subsequent lockdown impacted the economy, the for the January-March quarter (Q4) grew by 3.1 per cent, as per provisional estimates released by Ministry of Statistics and Programme Implementation (MoSPI) on Friday. "Consequently, the estimates (quarterly as well as annual) are likely to undergo revision", it said.

The output of eight core infrastructure industries shrank by a record 38.1% in April due to the coronavirus-induced lockdown, according to the official data.

More news: Next time, India to block locust attack at border itself: Minister

A deserted view of Yamuna Expressway that connects Delhi with Agra during a 21-day nationwide lockdown to slow the spreading of COVID-19 in Agra, India, on April 7, 2020.

In March this year, the production of eight sectors - coal, crude oil, natural gas, refinery products, fertiliser, steel, cement, and electricity - had contracted by 9%.

Professional forecasters veered towards a consensus that India's economy will face its worst recession in 40 years, contracting by at least 5% this fiscal. The GDP expanded 4.4 in the September quarter and 5.2 per cent in the June quarter of 2019-20. "Assuming economic activity gets restored in a phased manner especially in the second half of this year, and taking into consideration favorable base effects, it is expected that the combination of fiscal, monetary and administrative measures being now undertaken both by the government and the RBI could create conditions for a gradual revival in activity in the second half of 2021".

He had also said that the inflation outlook is highly uncertain.

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