India’s economy likely suffered its largest quarterly slump on record, data is expected to show on Monday, as COVID-19 related lockdowns add to already-declining consumer demand and investment.
Data due August 31 will likely show GDP declined 19.2 per cent in the quarter to June from a year ago, according to economists surveyed by Bloomberg as of Friday. That would be the sharpest contraction since the nation started publishing quarterly figures in 1996, and is worse than any of the main Asian economies tracked by Bloomberg.
Economists in a Reuters poll predicted that gross domestic product in world’s fifth-largest economy will contract by 18.3% in the June quarter, compared to 3.1% growth in the previous quarter, the worst performance in at least eight years.
The same economists predict a contraction of 8.1% and 1.0% in the September and December quarters respectively, which would dash any hopes of an economic recovery this year.
India has reported over three and a half million cases of the novel coronavirus – third behind only the United States and Brazil.
Continuing restrictions on transport, educational institutions and restaurants – and weekly lockdowns in some states – have hit manufacturing, services and retail sales, while keeping millions of workers out of jobs.
Shilan Shah, India economist at Capital Economics, Singapore, said in a note on Friday the economic damage caused by pandemic-related lockdowns was much worse in India than any other country in Asia.
