India's economic growth rate may contract 16-20% in Q1, says Icra

This would mean a contraction of 1-2 per cent for entire FY21, against the agency's earlier projection of -1 per cent to 1 per cent

Rating agency Icra has further cut its projections for India's economic growth rate to -16 per cent to -20 per cent in the first quarter of the current financial year from its earlier estimate of -10 per cent to -15 per cent.
 

This would mean contraction of 1-2 per cent for entire FY21, against our earlier projection of -1 per cent to 1 per cent, Icra Principal Economist Aditi Nayar said. “While the graded relaxations announced by the government will permit the resumption of economic activity, the relatively stringent norms for major urban centres will result in the pace of activity remaining constrained,” she said.

Given the likelihood of mismatches in labour availability, she said she now expected the drag from sectors such as manufacturing, construction, trade, hotels and transport, etc, to linger for a large part of May 2020, with a further delay in the return to normalcy for a large cross-segment of these sectors.