In accordance with the latest round of Economic Outlook Survey of FICCI (Federation of Indian Chambers of Commerce and Industry), India’s annual median Gross Domestic Product (GDP) growth forecast for FY2020-21 has been declined to (-) 4.5% with a minimum and maximum growth estimate of (-) 6.4% and 1.5% respectively, as compared to January 2020 estimate of 5.5%. The current round of the survey was conducted in the month of June 2020.
- The key reason behind this sharp decline is the lockdown to contain the rapid spread of COVID-19 which has severely impacted economies and healthcare globally. Now in Post lockdown, continuation of social distancing and quarantine measures is also affecting the growth prospects.
- The official growth numbers for the first quarter (Q1FY21) are expected to be released by the end of August 2020.
- As per the survey, there is a possibility of V-shaped recovery with government expenditure as in the current situation; it is the only helping hand for financial position of the economy.
Key Points from survey- Growth prediction for Agriculture sector; Industry, service sector suffer
-The quarterly median forecasts indicate GDP growth to contract by (-) 14.2% in the first quarter of 2020-21, with a minimum estimate of (-) 25% and a maximum estimate of (-) 7.4%.
-Economic activity-wise annual forecast indicated a median growth of 2.7% for agriculture and allied activities for 2020-21.
-Industry and services sector, on the other hand, are expected to contract by 11.4% and 2.8%, respectively in 2020-21.
-The median growth forecast for IIP (India Industrial Production) has been put at (-) 11.5% for the year 2020-21 with a minimum and maximum range of (-) 15.3% and 1% respectively.
–Wholesale Price Index (WPI) based inflation rate is projected at -0.3% in 2020-21, with a minimum and maximum range of (-) 1.5% and 2.5% respectively.
-On the other hand, Consumer Price Index (CPI) based inflation has a median forecast of 4.4% for 2020-21, with a minimum and maximum range of 3.3% and 6% respectively.
-The median current account balance forecast has been pegged at (-) 0.3% of GDP for 2020-21.
About FICCI (Federation of Indian Chambers of Commerce and Industry):
Secretary General– Dilip Chenoy
President– Sangita Reddy
Headquarter– New Delhi
