Real GDP expected to fall by 9.5 percent in current fiscal
The growth rate in the second quarter of the current financial year is expected to be 9.8 percent negative. It is expected to decline by 5.6 percent in the third quarter and by 0.5 percent in the fourth quarter.
Mumbai: The Reserve Bank’s Monetary Policy Committee (MPC) has said that the actual GDP is expected to fall by 9.5 percent in the current financial year due to Coronavirus (COVID-19) and an increase of 20.6 percent is expected in the first quarter of the next financial year.
A statement issued after the third bi-monthly meeting of the committee chaired by Reserve Bank Governor Shakti Kant Das said that the uncertainty caused by Covid-19 is likely to continues to a negative growth rate of minus 9.8 percent in the second quarter of the current financial year.
It is expected to decline by 5.6 percent in the third quarter and by 0.5 percent in the fourth quarter. 20.6% growth is expected in the first quarter of 2021-22.
GDP falls by almost 24 percent in the first quarter
Mr. Das said that GDP was expected to stabilize in the second quarter after falling by about 24 percent in the first quarter. The economy is improving due to increasing government spending and increasing demand in rural areas. Cost cores are still under pressure due to supply disruptions and rising transportation costs due to the coronavirus, but these risks have begun to decrease since unlock.
He said that the rural economy is expected to improve, but due to social distance, there is little scope for improvement in urban demand. It may take time for the service sector to move beyond Covid, but the manufacturing sector is expected to improve in the third quarter.
Private investment and exports are expected to remain under pressure as Covid-19 is expected to cause a reduction in imports.