The Indian economy contracted 23.9% in the first quarter of financial year 2020 - 2021 (April - June), reported the Ministry of Statistics and Program Implementation (MOSPI) on Monday, in India's worst ever decline. India's gross value added in this period declined 22.8%. This is India's first ever economic decline in more than 40 years.
All sectors of the economy, except agriculture and farming which grew at 3.4%, posted a decline. Construction declined 50.3%; trade hotels and transport declined at 47%, and manufacturing at over 39%. Mining and quarrying declined at over 23%, government and defence at over 10% and financial services at 5.3%.
These numbers are significant, as they capture the extent of the damage that the nationwide lockdown imposed by government late March to prevent the spread of the ongoing COVID-19 pandemic caused the Indian economy.
An estimate from the research desk of the State Bank of India, put India's first quarter GDP decline at 16.5%, raising it from a decline of 20%.
India now joins a multitude of other large economies reporting unprecedented economic declines in this quarter, such as the United States, United Kingdom, Germany, Japan and France.
The full release can be found here.
Forecast for FY21
Many banks, research houses and international organisations have said earlier in the year that India is slated for an economic contraction in the current financial year; the only differentiating factor in their reports was by how much.
- The World Bank estimated India's real GDP contraction to be 3.2%
- The International Monetary Fund estimated GDP contraction to be 4.5%
- Fitch and CRISIL see the decline to be 5%
- The research desk of SBI puts the decline at 6.8%
- HSBC India pegs the decline at 7.2%
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