India first quarter GDP growth likely to be weakest since 2012: Poll

India’s economic system is more likely to have expanded at its slowest tempo in at the least eight years within the January-March quarter, partly because of the coronavirus clampdown, a Reuters ballot predicted.

Asia’s third-largest economic system started slowing final yr, however a national lockdown on March 25 halted financial exercise fully.

“Activity in January and February was strong, but the slowdown in March is likely to have largely offset those gains,” Aayushi Chaudhary, an economist at HSBC in Mumbai, mentioned.

The ballot of 52 economists, taken May 20-25, indicated India’s economic system grew at 2.1% within the March quarter from a yr in the past, its weakest since comparable information started in early 2012, and sharply slower than 4.7% within the prior three months.

Forecasts for gross home product (GDP) knowledge, because of be launched on May 29 at 1200 GMT, ranged between +4.5% and -1.5%, underscoring the widespread uncertainty on the impression of the coronavirus on the economic system at that stage.

While solely six economists within the ballot forecast a contraction in the course of the first quarter, main indicators for March already launched have signalled a big hit to GDP in January-March.

“Given the unprecedented collapse in activity in late March after the lockdown started, we think the economy will have contracted last quarter,” Shilan Shah, senior India economist at Capital Economics in Singapore, mentioned.

“A prolonged period of restrictions, along with limited financial support means that India’s economy will contract this year for the first time in over four decades,” Shah added.

Policymakers have stepped up fiscal and financial stimulus in response, however a number of economists mentioned these would at greatest enhance credit score availability.

“The government’s latest stimulus package will serve only to cushion the blow over the long run, rather than help fill the shortfall in demand in the near term,” mentioned Freya Beamish, chief Asia economist at Pantheon Macroeconomics.

“The extension of India’s lockdown until the end of May all but guarantees an unprecedented economic recession.”