India's Economy Seen Slowing Rapidly in March Quarter, With Worse to Come

Daniel Fowler
May 29, 2020

This is accorfing to the official gross domestic product (GDP) data released on Friday.

GDP is a key indicator of overall economic activity.

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%. The GDP figures are keenly watched every quarter for cues on broader economic performance. On a sequential basis, the quarterly growth rate has progressively come down from 5.2 per cent in Q1 of 2019-20 to 4.4 per cent in Q2 and 4.1 per cent in Q3.

Prime Minister Narendra Modi has maintained the lockdown ordered on March 25 to curb the spread of COVID-19 in the world's second most populous country, though many restrictions were eased for manufacturing, transport and other services from May 18.

Meanwhile, the output of the eight core sectors in India declined by a massive 38.1% in April, as against a decline of 6.5% in March 2020.

The Eight Core Industries comprise 40.27 per cent of the weight of items included in the Index of Industrial Production (IIP).

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Khloe was referring to California's Governor Gavin Newsom's previous suggestion to keep gatherings of people at high risk of severe coronavirus illness below 10 people .

But the economy is expected to rebound to some extent in the third and fourth quarters, assuming the country manages to avoid a second wave of the virus.

India's fiscal deficit for FY20 widened to 4.59 percent of the gross domestic product (GDP) overshooting government target of 3.8 percent by almost 80 basis points. Well, the growth numbers were broadly in line with the estimates.

"India is seeing a collapse of demand".

"COVID-19 has not yet been contained in India".

A handful of other economic indicators had hinted that March 2020 would have been a hard month for the Indian economy. "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".

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