India extending the nationwide lockdown till May 3 will inflict an economic loss of $234.4 billion and result in stagnant gross domestic product (GDP) for calendar year 2020, British brokerage Barclays recently said. The economic growth will be zero for 2020 and when seen from a fiscal year perspective, will rise by 0.8 per cent in 2021, it said in a note.
The brokerage was earlier expecting India to clock a 2.5 per cent growth in 2020, which has now been projected to be zero, while the fiscal 2020-21 growth has been revised down to 0.8 per cent from the 3.5 per cent earlier.India extending the nationwide lockdown till May 3 will inflict an economic loss of $234.4 billion and result in stagnant gross domestic product (GDP) for calendar year 2020, British brokerage Barclays recently said. The economic growth will be zero for 2020 and when seen from a fiscal year perspective, will rise by 0.8 per cent in 2021, it said in a note.#
"As India heads into a longer complete shutdown until May 3 to combat the rising number of COVID-19 cases, the economic impact looks set to be worse than we had expected earlier,” the brokerage was quoted as saying by a news agency.
Noting that while India is still not officially calling the infections to be in the community transmission stage, the existing restrictions on movement are causing much more economic damage than anticipated.
In particular, the negative impact on the ‘essential sectors’ of mining, agriculture, manufacturing and utility sectors appears higher than expected, it said.
The brokerage said while arriving at the numbers, it has assumed that the lockdowns end by early June, followed by a modest rebound in activity, reflecting inventory rebuilding across certain sectors.
If the COVID-19 outbreaks in a localised area continue leading to frequent shutdowns, the scope for the economy to recover will continue to decline, it cautioned.
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