Will GDP India Contract to 11.8% in FY21?
To Rebound to 9.9% in FY22 The quantum of negative gross domestic product (GDP) growth of 23.9% recorded in 1Q FY21 is much higher than India Ratings and Research’s (Ind-Ra) forecast of 17.0%, because of the impact of the COVID-19 pandemic and resultant lockdown. The agency has, therefore, revised its FY21 GDP growth forecast further downward to negative 11.8% from negative 5.3%. The negative 23.9% growth in 1QFY21 is the first contraction in quarterly GDP data series which have been made available in the public domain since 1Q FY98. The economic loss in FY21 is estimated to be INR18.44 trillion. However, GDP is expected to rebound and grow at 9.9% YoY in FY22 mainly due to the weak base of FY21. All indicators, be it mobility or consumption, are pointing towards a much weaker economic recovery. Out of 35 states/union territories (UTs), workplace mobility improved only in 16 states/UTs between end-May and end-August 2020. As the number of COVID -19 infections picked up sign