2020-21 GDP growth likely to remain in negative territory: RBI Guv

Painting a gloomy picture of the economy, the Reserve Bank of India (RBI) on Friday said the impact of COVID-19 is more severe than anticipated and the GDP growth during 2020-21 is likely to remain in the negative territory.

The outlook of inflation also remains "highly uncertain", RBI Governor Shaktikanta Das said while announcing a 40-basis point cut in the repo rate as part of the monetary measures to deal with the current crisis.

It is the second sharp cut in the key policy rate in two months. On March 27, the Monetary Policy Committee (MPC), the rate-setting panel of the RBI, had cut the key short-term lending rate by 75 basis points.

Given all the uncertainties related to the lockdown and social distancing, he said, "GDP (gross domestic product) growth in 2020-21 is estimated to remain in negative territory, with some pick-up in growth impulses from second half of 2020-21 onwards."
He said that by all counts, the macroeconomic and financial conditions are austere. "The global economy is inexorably headed into recession."