GDP

Next update in January 2021

Next update in January 2021

Next update in January 2021

 

 

  • Indian economy is expected to contract in the range of (-) 6-7% in FY21.
  • In order to curb the spreading of COVID-19 pandemic, government had announced complete lockdown for three weeks in April and extended to May.
  • However, though the unlock process has started from June onwards, the acceleration in new infected cases has subdued economic activity.
  • Accordingly, prolonged lockdown severely impacted the economic activities in the country.
  • Q1 GDP has contracted by around (-) 23.9% due to months long lockdown. Nevertheless, Q2 performance has been better than expected, shoring up confidence levels.
  • Continued healthy growth in agricultural production and stimulus packages are crucial for the sharp recovery in H2.
  • The positive factors for the financial year have been lower commodity prices (including oil price) along with easy money.
  • Nevertheless, the inflationary tendencies are critical moniterables at this time.
  • In an attempt to curb the economic distress, major central banks are however following dovish monetary stance. The RBI has also time and again communicated its ‘Whatever it takes’ stance to calm the market.
  • On the demand side, higher unemployment levels and instabilities are expected to undermine the sustainability of consumer confidence.