On July 21, 2020 As per the report of Nomura Holdings, Inc, a japanese brokerage firm, India’s Gross domestic Product(GDP) is likely to contract by 6.1%(-6.1%) in FY21 as economic activity continues to be weak due to COVID-19 pandemic.
Other Projections of Nomura
i.India’s economy to contract by 15.2% in the June quarter. For the rest of this fiscal year, GDP will never be positive. It is to be noted that this quarter will be ”nadir”(the lowest or most unsuccessful point in a situation) from a growth perspective.
ii.It estimated contractions of 5.6% in the September quarter, 2.8% for the December quarter and 1.4% in the March quarter.
It suggests that there will be an increase in inflation, which will further pull down the GDP in real terms.
i.The Reserve Bank of India(RBI) is expected to suspend its policy review in August and cut rates by 25 basis points each in the October and December reviews.
ii.On the monetary policy front, the RBI has already cut rates by a cumulative 1.15% since the beginning of the pandemic.
Growth Estimates- After analysing ”ultra” high frequency indicators such as various mobility indices, employment and electricity demand, the growth estimates are calculated.
Note– All the analysts expect a contraction in the GDP due to the COVID-19 pandemic, which has impacted both supply and demand forces in the economy since March 2020.
About Nomura Holdings, Inc:
Headquarters– Tokyo, Japan
President and Group CEO– Kentaro Okuda
Recent Related News:
i.As per the India Ratings and Research (Ind-Ra), India’s Gross domestic Product (GDP) is likely to shrink by 5.3% in FY20-21, the lowest GDP growth in the Indian history.
ii.S&P Global Ratings predicted that Indian economy will shrink 5 per cent in FY21.