India's GDP figure released for quarter 1 (April, May, June) by the Ministry of Statistics and Programme Implementation (MoSPI) showed that the GDP had contracted by -24%
India's GDP figure released for quarter 1 (April, May, June) by the Ministry of Statistics and Programme Implementation (MoSPI) showed that the GDP had contracted by -24%|Fitch Ratings
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India's GDP growth to contract by 10.5% says rating agency Fitch

India's GDP figure released for quarter 1 (April, May, June) by the Ministry of Statistics and Programme Implementation (MoSPI) showed that the GDP had contracted by -24%

Shoubhik Roy Choudhury

India's gross domestic product (GDP) growth for the current fiscal year 2020-21 (FY21) is expected to contract by -10.5 per cent. The earlier forecast was 5%.

The revision in the forecast by Fitch means that the economy will see massive challenges ahead. India's GDP figure released for quarter 1 (April, May, June) by the Ministry of Statistics and Programme Implementation (MoSPI) showed that the GDP had contracted by -24% which was higher than -20% expected.

ercentage change in the main indicators used in the GDP estimation
ercentage change in the main indicators used in the GDP estimationMinistry of Statistics & Programme Implementation
Quarterly Estimates of GVA at basic proces in quarter 1
Quarterly Estimates of GVA at basic proces in quarter 1Ministry of Statistics & Programme Implementation

Fitch expects the economy to get back on track in the third quarter of 2020, but it could be slow and uneven. Imports, two-wheeler sales and capital goods production are yet to pick up. States and union territories imposing regional restrictions to contain COVID-19 has also disrupted economic activity. Disruption in supply-chain and increase in excise duties have lead to a rise in prices.

However, Inflation is expected to slow down as demand is weak. As states open up and supply-chains are established, the economy will slowly pick up. A good monsoon is also crucial.

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