Indian GDP shrinks by 23.9% in the quarter ending June 2020. The economy’s worst performance since the measure started in 1996 and perhaps our first contraction in 4 decades!! Yes, that’s how bad COVID and the lockdown have impacted us!!
While most economies have been impacted, India’s GDP contraction is the worst. China’s economy contracted during the last quarter.
Agriculture was the only sector that grew and without enhanced spending by the Centre and States, Q1 GDP might have fallen even further. Private consumer spending which is the bedrock of our economy fell by 27%. Everyone I know has stayed home and are spending less; this was surely expected!!
The bigger question is How long will this last? Will the recovery be L shaped or V-shaped?
Even before the pandemic struck, India was in the midst of a slowdown due to the Banking crisis. With limited fiscal support possibilities, and COVID cases still high, the road to recovery looks arduous.
Source: Moneycontrol, Business Standard, Livemint