Hit by the weak economic activity, India is most likely to see the deepest recession in its history.
In the latest note, Goldman Sachs economists Prachi Mishra and Andrew Tilton said the country would see its GDP declining by 5 percent for the FY 2020-21.
Goldman Sachs expects the GDP contraction by annualized 45 percent in the second quarter, compared to its previous forecast of 20 percent.
While a strong rebound is expected in the third quarter, the forecast for the fourth quarter and the initial months of 2021 will be at 14 percent and 6.5 percent, respectively.
These projections reflect in the real GDP rate that is expected below 5% at the end of the fiscal.
Stating that there has been a series of structural reforms boosting industrial activity, the economists note that they are more of ‘medium-term’ in nature.
They feel that these reforms might not have an immediate impact on economic revival.
To revive the industry performance, the Indian Government has taken a slew of measures over the last week.
One of them was offering a due boost to the suffering MSMEs in the form of ‘Stimulus Package 2.0’ and pitching for self-reliant India under the #MadeInIndia drive.
To the government’s decision on MSME empowerment, the industry bodies like CII, FIEO and others have also expressed confidence about economic revival.
Towards encouraging local business activity across states, the government also increased its funding support under MNREGA.
Hope all these efforts will give a due boost to the Indian economy.
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