India’s GDP likely to shrink 5%

NEW DELHI — India is likely to suffer from its fourth recession in the last 69 years, as the country’s GDP is likely to contract by 5 per cent in fiscal year 2021, credit rating agency Crisil said in a report on Tuesday.

The report comes days after the Reserve Bank of India predicted that India’s GDP growth for the financial year 2020-21 may remain in the negative territory. Earlier, on April 28, it had slashed growth prediction to 1.8 per cent from 3.5 per cent.

“Things have only gone downhill since,” a Crisil Research report said. “While we expect non-agricultural GDP to contract 6 per cent, agriculture could cushion the blow by growing at 2.5 per cent.”

“The reason was the same each time a monsoon shock that hit agriculture, then a sizeable part of the economy,” the report added. “The recession staring at us today is different. For one, agriculture could soften the blow this time by growing near its trend rate, assuming a normal monsoon. Two, the pandemic-induced lockdowns have affected most non-agriculture sectors. And three, the global disruption has upended whatever opportunities India had on the exports front.” —