India’s economy contracts by 23.9%, worst in decades
India’s gross domestic product (GDP) fell by 23.9% in April-June period quarter, official data released by the Union ministry of statistics and programme implementation (Mospi) showed on Monday, amid coronavirus pandemic-induced which hit businesses and livelihoods across the country.
India’s economy had grown at 3.1% in the January-March quarter, its slowest pace in at least eight years. The GDP data had shown that consumer spending slowing, private investments and exports contracting in the March quarter.
Experts had said the country’s economy was expected to contract mainly because this quarter had seen more of the 68-day nationwide lockdown restrictions, which were enforced by the government from March 25 to contain the spread of the coronavirus disease (Covid-19) outbreak.
Data showed earlier that India’s GDP growth had slowed even before the Covid-19-induced lockdown restrictions. The growth rate in Q4 FY20 at 3.1% was the weakest point in the new data series that had started in 2012-2013. The FY20 real GDP growth is 4.2%, which is also the weakest in the series.
India’s economy grew at its weakest pace since 2013 between April and June period last year as consumer demand and government spending slowed amid global trade frictions, raising chances of the central bank cutting interest rates further at its next meeting. Asia’s third-largest economy expanded just 5.0% year on year, it grew 8% in the same quarter of 2018, and 5.8% in the previous quarter.
Global economies are experiencing contraction due to the Covid-19 pandemic. The International Monetary Fund (IMF) has estimated a global contraction of 4.9% in 2020. The United Kingdom’s (UK) economy has reported a 21.7% year-on-year plunge in the June quarter.