India may see first contraction in 40 years on lockdown extension
Skip to main content
  • Home
  • Economy
    • Aviation
    • Bazaar
    • Budget
    • Industry
    • NBR
    • RMG
    • Corporates
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Features
    • Book Review
    • Brands
    • Earth
    • Explorer
    • Fact Check
    • Family
    • Food
    • Game Reviews
    • Good Practices
    • Habitat
    • Humour
    • In Focus
    • Luxury
    • Mode
    • Panorama
    • Pursuit
    • Wealth
    • Wellbeing
    • Wheels
  • Epaper
  • More
    • Subscribe
    • Videos
    • Thoughts
    • Splash
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • COVID-19
    • Games
    • Long Read
    • Interviews
    • Offbeat
    • Podcast
    • Quiz
    • Tech
    • Trial By Trivia
    • Magazine
  • বাংলা
The Business Standard

Friday
January 27, 2023

Sign In
Subscribe
  • Home
  • Economy
    • Aviation
    • Bazaar
    • Budget
    • Industry
    • NBR
    • RMG
    • Corporates
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Features
    • Book Review
    • Brands
    • Earth
    • Explorer
    • Fact Check
    • Family
    • Food
    • Game Reviews
    • Good Practices
    • Habitat
    • Humour
    • In Focus
    • Luxury
    • Mode
    • Panorama
    • Pursuit
    • Wealth
    • Wellbeing
    • Wheels
  • Epaper
  • More
    • Subscribe
    • Videos
    • Thoughts
    • Splash
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • COVID-19
    • Games
    • Long Read
    • Interviews
    • Offbeat
    • Podcast
    • Quiz
    • Tech
    • Trial By Trivia
    • Magazine
  • বাংলা
FRIDAY, JANUARY 27, 2023
India may see first contraction in 40 years on lockdown extension

Coronavirus chronicle

TBS Report
16 April, 2020, 02:00 pm
Last modified: 16 April, 2020, 02:30 pm

Related News

  • 'Pathaan' release sees scattered protests across India
  • The German Due Diligence Act: Are we ready?
  • China's open borders and push to stoke economy may revive dealmaking, advisers say
  • India chooses Dilip Mahalanabis for 'Padma Vibhushan' award
  • 'Amrit Kaal' of the Indian economy

India may see first contraction in 40 years on lockdown extension

"Data suggests that the economic cost of the lockdown is huge. Incomes of nearly half the households have shrunk and most of them do not have hopes of a revival"

TBS Report
16 April, 2020, 02:00 pm
Last modified: 16 April, 2020, 02:30 pm
India may see first contraction in 40 years on lockdown extension

India's economy may be heading for its first full-year contraction in more than four decades after Prime Minister Narendra Modi extended the world's biggest lockdown to contain the coronavirus outbreak, according to different economist's prediction.

The extension of the mandatory stay-at-home period to 40 days from 21 days will result in a direct output loss of more than 8 per cent over that time, according to Sonal Varma of Nomura Holdings Inc.

Varma and Kunal Kundu of Societe Generale GSC Pvt. now predict a decline in gross domestic product for the year to March 2021 of 0.4 per cent and 0.1 per cent respectively. The economy had last contracted in 1980, when GDP shrank 5.2 per cent.

"There will be indirect effects such as the persistence of the public fear factor even after the lockdown ends," said Varma, head of Asia economics ex-Japan at Nomura. Besides, there will be an "impact on livelihoods of the unorganized workforce, and a sharp increase in corporate and banking sector stress, which are likely to further weigh on growth."

The index of consumer sentiment plummeted to its lowest level since 2015, immediately after the nationwide lockdown was announced by the government on March 24, according to a report by researcher Center for Monitoring Indian Economy. The index, which has a base of 100, plunged to 52 by March 29, a 47 per cent fall in a single week, showing drastic impact on household sentiment. The index stood at 102.5 in the first week of March.

"This extremely bleak view of the future makes the task of an economic revival after the lifting of the lockdown particularly challenging," Mahesh Vyas, managing director of CMIE, said in the report.

"Data suggests that the economic cost of the lockdown is huge. Incomes of nearly half the households have shrunk and most of them do not have hopes of a revival."

According to Bloomberg's Economists: "A precipitous recession in India is inevitable."

"We are slashing our fiscal 2021 GDP forecast to a contraction of 4.7 per cent, down 10.7 percentage points from 6 per cent growth we expected before the coronavirus sideswiped the economy," Abhishek Gupta, India economist said.

Here are some more comments from other economists:

Aditi Nayar, principal economist, ICRA said, GDP contracting in a range of 10 per cent-15 per cent in the first quarter, "which would translate to a bleak full year growth band of +/-1 per cent."

"The lockdown could shave off just under 6 per cent of India's GDP, while cutting her growth forecast to 0.5 per cent. "Moreover, an extended lockdown will also prolong the time for economic recover," Teresa John, economist, Nirmal Bang Institutional Equities said.

Rahul Bajoria, senior economist, Barclays Bank Plc, said, Combined with the disruption in several service sectors, he estimates economic loss will be close to 8.1 per cent of GDP and is forecasting the economy to grow 0.8 per cent this year. "However, if we are still seeing localized Covid outbreaks, which lead to frequent shutdowns, the scope for the economy to recover will continue to decline."

World+Biz / Top News

India / Economy / predictions / down

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • Manufacturers feel the pinch as consumers tighten belt
    Manufacturers feel the pinch as consumers tighten belt
  • Sugar turning bitter!
    Sugar turning bitter!
  • Island hopping in Bangladesh?
    Island hopping in Bangladesh?

MOST VIEWED

  • A vial of the Pfizer-BioNTech coronavirus disease (COVID-19) booster vaccine targeting BA.4 and BA.5 Omicron sub variants is pictured at Skippack Pharmacy in Schwenksville, Pennsylvania, U.S., September 8, 2022. REUTERS/Hannah Beier
    US CDC still looking at potential stroke risk from Pfizer bivalent Covid shot
  •  A medical worker checks the IV drip treatment of a patient lying on a bed in the emergency department of a hospital, amid the coronavirus disease (COVID-19) outbreak in Shanghai, China, January 5, 2023. REUTERS/Staff
    China says Covid deaths down by nearly 80 percent
  • Sean Bagley, 14, receives the Pfizer-BioNTech coronavirus disease (COVID-19) booster vaccine targeting BA.4 and BA.5 Omicron sub variants at Skippack Pharmacy in Schwenksville, Pennsylvania, U.S., September 8, 2022. REUTERS/Hannah Beier
    Updated Covid vaccines prevented illness from latest variants -CDC
  • People embrace at the international arrivals gate at Beijing Capital International Airport after China lifted the coronavirus disease (COVID-19) quarantine requirement for inbound travellers in Beijing, China January 8, 2023. REUTERS/Thomas Peter
    China says peak Covid infections exceeded 7 million daily, deaths more than 4,000 daily
  • A woman holds a small bottle labelled with a "Coronavirus COVID-19 Vaccine" sticker and a medical syringe in this illustration taken October 30, 2020. REUTERS/Dado Ruvic/File Photo
    US proposes once-a-year Covid shots for most Americans
  • The United Nations headquarters building is pictured though a window with the UN logo in the foreground in the Manhattan borough of New York August 15, 2014. REUTERS/Carlo Allegri (UNITED STATES
    Covid-19 cut known human trafficking, but Ukraine war a risk: UN

Related News

  • 'Pathaan' release sees scattered protests across India
  • The German Due Diligence Act: Are we ready?
  • China's open borders and push to stoke economy may revive dealmaking, advisers say
  • India chooses Dilip Mahalanabis for 'Padma Vibhushan' award
  • 'Amrit Kaal' of the Indian economy

Features

Island hopping in Bangladesh?

Island hopping in Bangladesh?

1h | Panorama
According to the CAB president Ghulam Rahman, one of the most common complaints of consumers is being deceived by sellers when it comes to the weight of goods. Photo: TBS

Has the Directorate improved consumer rights in Bangladesh?

2d | Panorama
A 2022 survey of 1,000 companies by professional services consultancy PwC found that between a sixth and a quarter had used AI in recruitment or employee retention in the past 12 months. Illustration: Bloomberg

AI is coming to your workplace. Is the world ready?

2d | Panorama
Edison Desdemona, the newly launched stellar project of Edison Real Estate, located at Bashundhara Residential Area. Photo: Courtesy

EDISON DESDEMONA: A creation like no other

2d | Habitat

More Videos from TBS

Kajol’s road paintings bring change in Gafargaon

Kajol’s road paintings bring change in Gafargaon

13h | TBS Stories
Carew & Company witnessed a remarkable growth

Carew & Company witnessed a remarkable growth

14h | TBS Stories
PCB recalls cricketers from BPL ahead of PSL

PCB recalls cricketers from BPL ahead of PSL

16h | TBS SPORTS
Why Misha Sawdagar became villain instead of a Hero?

Why Misha Sawdagar became villain instead of a Hero?

15h | TBS Entertainment

Most Read

1
Picture: Collected
Bangladesh

US Embassy condemns recent incidents of visa fraud

2
Four top bankers arrested in DSA case filed by S Alam group 
Bangladesh

Four top bankers arrested in DSA case filed by S Alam group 

3
Illustration: TBS
Banking

16 banks at risk of capital shortfall if top 3 borrowers default

4
Photo: Collected
Splash

Hansal Mehta responds as Twitter user calls him 'shameless' for making Faraaz

5
A frozen Beyond Burger plant-based patty. Photographer: AKIRA for Bloomberg Businessweek
Bloomberg Special

Fake meat was supposed to save the world. It became just another fad

6
Representational Image
Banking

Cash-strapped Islami, Al-Arafah and National turn to Sonali Bank for costly fund

EMAIL US
[email protected]
FOLLOW US
WHATSAPP
+880 1847416158
The Business Standard
  • About Us
  • Contact us
  • Sitemap
  • Privacy Policy
  • Comment Policy
Copyright © 2023
The Business Standard All rights reserved
Technical Partner: RSI Lab

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - [email protected]

For advertisement- [email protected]