OECD lowers India’s FY21 GDP growth to 5.1%

Agency factors in impact of COVID-19

Global agency OECD on Monday lowered its India’s GDP growth forecast to 5.1% from the earlier projection of 6.2% for 2020 on concerns of impact of the deadly COVID-19 on the domestic as well as the global economy.

Lowest since 2008-09

The OECD lowered its global GDP forecast by half a percentage point to 2.4%, the lowest rate since the 2008-09 financial crisis.

The Organisation for Economic Cooperation and Development (OECD) said the adverse impact on confidence, financial markets, travel sector and disruption to supply chains contributes to the downward revisions in all G20 economies in 2020, particularly ones strongly interconnected to China. According to the latest OECD Interim Economic Outlook Forecasts, India’s real GDP growth is expected at 5.1% during the fiscal year starting April 1, 2020 and improve to 5.6% in the following year. The latest projection for 2020-21 is 1.1 percentage points lower than the November 2019 forecast. The Economic Survey tabled by the government in Parliament has projected India’s economic growth at 6 -6.5% in the next financial year starting April 1.

The National Statistical Office (NSO) estimates India’s GDP growth at 5% during 2019-20. OECD has projected the growth at 4.9% for the financial year ending March 2020.

The report said the coronavirus (COVID-19) outbreak had already brought considerable human suffering and major economic disruption.

Output contractions in China are being felt around the world, reflecting the key and rising role China has in global supply chains, travel and commodity markets. Subsequent outbreaks in other economies are having similar effects, albeit on a smaller scale.

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