On Tuesday the Global forecasting firm Oxford Economics said that from October to December they expect that India’s GDP Gross Domestic Product growth to lose the momentum of the current fiscal as the push from the initial reopening fades. They also said that the country will likely take the longest among major economies to coverage to its pre-COVID-19 growth level. As the fares, the worst in its Asia recoveries scorecard. The central government attempts to restart the economy is already running around and said: “A reopening gone wrong”. This was the title of a report in India on Oxford Economics. Once the push from the initial reopening fades and likely compounded by the ongoing widespread pandemic and inadequate policy support, the legacy economic headwinds re-assert themselves that they expect GDP growth to lost momentum from late October to December.
The main risk in this is that the proactive steps by the regional governments, especially the richer ones, to stem the spread of the COVID-19 virus bring the tipping point forward. An early data according to Oxford Economics suggest that in June the positive economic impact of the accelerated lockdown exit will be felt, with the effect reinforced by the global growth Pic up that has aided a recovery in exports. It observed the outlook beyond that, but it has turned more worrisome. The reopening drive is already beginning to hit roadblock amid the rise in COVID-19 cases.
The first is that while we see a high probability of restrictions being tightened we will not expect them to match the stringency of phase one of the nationwide lockdown announced in March that caused the maximum economic damage.
Secondly, it has been noted that the rural economy which is leading the recovery so far, seems at a much lower risk of lockdown /shutting down again compared to cities, and they should help cushion the downside to domestic demand. In 2019 to 2020 India’s economic growth stood at 4.2 percent. In the current year Growth Projection by various global and domestic agencies shows a sharp contraction ranging from (-) 3.2 percent to (-) 9.5 percent. As the COVID-19 cases increased to 47703 with a single day, on Tuesday India’s coronavirus tally mounted to 1483156, and while the death toll rise to 33425 according to the Union health ministry data. Recovery date surged to 952743 pushing the data to 64.24 percent.