As per the report of DBS(Formerly, Development Bank of Singapore), Singaporean brokerage, India’s Gross domestic Product(GDP) will contract by 6%(-6%) in FY21 as the economy is yet to stabilise the COVID -19 infection curve and due to the caseload in the economically key states. This will affect the economy badly. In its earlier forecast, the brokerage had forecasted the growth as -4.8%.
Key Projections of the report
The infection curve, which is yet to stabilised reflects a deep double-digit contraction in Q1 and a flat pickup in Q2 and a return to growth
i.As per the granular analysis, about 7% of the districts account for 70% of the caseload in economically key states like Maharashtra (14% of national GDP), Tamil Nadu (8.5% of national GDP), Gujarat (8% of the national GDP), accounting to 30.5% of the national economic output.
ii.Karnataka and Andhra also contribute significantly to the national economic output and accounts for about 70% of the caseload.
Disruption in the renewed supply chain and uncertainty for manufacturers
There will be a disruption in the renewed supply chain and uncertainty for manufacturers, including automakers and electronics firms if the domestic flights are restricted by more states.
Rural demand and farm output
Rural demand and farm output, which are projected to be 2% in FY21 will act as a counter-balancing buffer for a decline in non-farm output
Meaning of Granular Analysis– A data that is in pieces, as small as possible, in order to be more defined and detailed.
About DBS Group:
CEO– Piyush Gupta
Non-Executive Chairman (DBS Group Holdings & DBS Bank)- Peter Seah
Recent Related News:
i.The latest report by CRISIL predicted that the gross domestic product (GDP) of Indian economy will contract by 5% in fiscal 2021.
ii.As per the United Nations (UN) Economic and Social Commission for Asia and the Pacific (ESCAP) report India’s FY21 GDP projected at 4.8% and recommended Asia-Pacific needs $880 mn/year health emergency fund amid COVID19.