Mumbai, 03 March 2020: The flow of bad news for India, on the economic front seems to be unending. There are some more days left to conclude the current Financial Year 2019-2020 (FY’20), which is expected to be poor for the Indian economy. However, another piece of news has arrived, which has claimed that the slowdown in the Indian economy will continue even in the next financial year (FY21), dashing the hopes of any recovery in the economy.
Global agency OECD on Monday lowered India’s GDP growth forecast to 5.1 per cent, from its earlier projection of 6.2 per cent, for 2020 on concerns over the impact of deadly corona virus on the domestic as well as the global economy.
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The Organisation for Economic Cooperation and Development (OECD) said the adverse impact on confidence, financial markets, travel sector and disruption to supply chains contributes to the downward revisions in all the G20 economies in 2020, particularly ones strongly interconnected to China. India is a member of G20, a grouping of developed and developing economies.
According to the latest OECD Interim Economic Outlook Forecasts, India’s real GDP growth is expected at 5.1 per cent during the fiscal year starting April 1, 2020, and improve to 5.6 per cent in the following year. The latest projection for 2020-21 is 1.1 percentage point lower than the November 2019 forecast.
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The Economic Survey tabled by the government in Parliament has projected India’s economic growth at 6 -6.5 per cent in the next fiscal year. The National Statistical Office (NSO) estimates India's GDP growth at 5 per cent during 2019-20. On the other hand, OECD has projected India’s growth at 4.9 per cent for the financial year ending March 2020.
The report said corona virus (COVID-19) outbreak has already brought considerable human suffering and major economic disruption.
Output contractions in China are being felt around the world, reflecting the key and rising role China has in global supply chains, travel and commodity markets. Subsequent outbreaks in other economies are having similar effects, albeit on a smaller scale.
Global economic growth will sink to levels not seen in over a decade as the corona virus outbreak hammers demand and supply, challenging central banks and governments to respond to a fast-changing situation, according to the OECD.
As central banks around the world try to calm a market panic, the Paris-based group also warned of possible global contraction this quarter. It cut its full-year growth to just 2.4 per cent from 2.9 per cent, which would be the weakest since 2009.
Global manufacturing contracted in February by the most since 2009 as the corona virus severely disrupted demand, trade and supply chains.
