India’s economic outlook worsens amid soaring coronavirus cases

According to the latest Reuters poll of economists, the Indian economic growth outlook remains in doldrums amid surging coronavirus cases, which will likely call for further easing by the Reserve Bank of India (RBI).

Key quotes

“In the quarter just gone by, the Indian economy is forecast to have shrunk 20.0% - the first double-digit contraction since official quarterly data started being released in the mid-1990s. It will then contract 6.0% and 0.3% in the current and following quarters, respectively, according to the poll.

That compared to a -5.2% forecast for the last quarter in the April 23 poll, followed by 0.8% and 4.2% growth in the current and next quarters, respectively.

For the current fiscal year, Asia’s third-largest economy is forecast to shrink 5.1%, a complete turnaround from the 1.5% growth predicted in the previous poll. It would be the weakest performance since 1979.

Under a worst-case scenario, the economy is forecast to have contracted 30.0% in the April-June quarter, and to shrink 10.0%, 4.0% and 9.1% in the current and next quarters and this fiscal year, respectively.

Inflation is expected to average 4.5% this fiscal year, and the RBI is forecast to cut the repo rate by another 25 basis points at its Aug. 4-6 meeting, and once more next quarter, to a record low of 3.50%.”

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.