Goldman Sachs: India's economy will shrink 45% this quarter and suffer a brutal recession this year
Goldman Sachspredicts the Indian economywill shrink by an annualized 45% this quarter as the coronaviruspandemic takes a heavy toll.
- The bank's economists expect the nation's GDP to rebound 20% in the third quarter of the year, compared to the current quarter, as economic activity comes back.
- Goldman forecasts a 5% drop in real GDP this fiscal year, marking
India's most severe recessionsince 1979.
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Goldman Sachs predicts the Indian economy will shrink by 45% on an annualized basis this quarter, and suffer its most severe recession since 1979 this fiscal year, as the coronavirus pandemic wreaks havoc on many of its industries.
The banking giant's latest quarterly growth forecast, detailed in a May 17 note, is significantly worse than its previous estimate of a 20% decline. More positively, its economists expect the Indian economy to rebound 20% in the third quarter, compared to the current quarter. They then anticipate 14% growthe in the fourth quarter and 6.5% growth in the first quarter of 2021.
Overall, Goldman's forecasts suggest India's GDP will slump 5% this fiscal year, which would be its steepest contraction since 1979.
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"There have been a series of structural reform announcements across several sectors over the past few days," they said in the note. "These reforms are more medium-term in nature, and we therefore do not expect these to have an immediate impact on reviving growth."
India has racked up more than 95,000 confirmed cases of coronavirus and more than 3,000 fatalities, according to the latest figures. The government has extended its
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