India’s GDP Growth Rate Seen At 1.2% For Q4 FY20, SBI Research Says
SBI Research says coronanavirus cases in India could peak any time in the last week of June and the curve could flatten thereafter
India’s gross domestic product is estimated to have growth at 1.2% in the last quarter of the previous fiscal, as the beginning of the coronavirus lockdown added to the woes of an already-slowing Indian economy.
India’s GDP growth rate stood at 4.7% in the third quarter, 5.1% in the second quarter and 5% in the first quarter of of 2019-20. SBI Research’s Ecowrap report estimates a full-year growth rate of 4.2% in FY20 and -6.8% in FY21. The GDP growth data for the March quarter will be announced by the National Statistical Office on May 29.
“We believe that Q4 (FY20) GDP growth would be around 1.2% as the economic activity in the last seven days of March month was completely suspended due to nationwide lockdown," the research report said. The report sees a loss of at least Rs 1.4 lakh crore during those seven days of lockdown.
Subsequently, the annual FY20 GDP growth would be around 4.2% as compared to 5% projected earlier, the report said. It estimates FY21 GDP growth rate at -6.8% and GVA growth at nearly -3.1%.
The loss is maximum—about 50%—in red zones, where almost all the big districts of the country are located. The combined loss in orange and red zones is about 90% of total loss.
State-wise analysis indicates that the Top 10 states accounted for 75% of total GDP loss. At 15.6%, Maharashtra had the biggest share of the total loss, followed by Tamil Nadu at 9.4% and Gujarat at 8.6%. These three states also have the largest number of confirmed coronavirus cases in India.
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The report further said that Covid-19 cases in the country could peak anytime in the last week of June. “Based on the current seven-day moving average of new cases, we believe that new cases are likely to peak somewhere in the last week of June, starting June 20," the report said.
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Following that, the new cases are expected to witness steep fall till the beginning of August after which it is expected to gradually reduce to flatten by mid-September.
The report, however, said the estimates are purely based on an assessment of current trends that can quickly change, given the cyclonic disaster in West Bengal and the continued reverse exodus of migrant labourers.