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OECD slashes India's FY21 growth forecast to 5.1% on coronavirus woes

According to the latest OECD Interim Economic Outlook Forecasts, India's real GDP growth is expected at 5.1 per cent during the fiscal year starting April 1, 2020


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South Korean soldiers wearing protective suits spray disinfectant in Daegu. Photo: AP/PTI

Global agency on Monday lowered India’s GDP growth forecast to 5.1 per cent, from its earlier projection of 6.2 per cent, for 2020 on concerns over the impact of deadly on the domestic as well as the global economy. The Organisation for Economic Cooperation and Development (OECD) said the adverse impact on confidence, financial markets, travel sector and disruption to supply chains contributes to the downward revisions in all the G20 economies in 2020, particularly ones strongly interconnected to China. India is a member of G20, a grouping of developed and developing economies. According to the latest Interim Economic Outlook Forecasts, India’s real GDP growth is expected at 5.1 per cent during the fiscal year starting April 1, 2020, and improve to 5.6 per cent in the following year. The latest projection for 2020-21 is 1.1 percentage point lower than the November 2019 forecast. The Economic Survey tabled by the government in Parliament has projected India’s economic growth at 6 -6.5 per cent in the next fiscal year. The National Statistical Office (NSO) estimates India's GDP growth at 5 per cent during 2019-20. The has projected India’s growth at 4.9 per cent for the financial year ending March 2020. The report said (COVID-19) outbreak has already brought considerable human suffering and major economic disruption. Output contractions in China are being felt around the world, reflecting the key and rising role China has in global supply chains, travel and commodity markets.

Subsequent outbreaks in other economies are having similar effects, albeit on a smaller scale. Global economic growth will sink to levels not seen in over a decade as the outbreak hammers demand and supply, challenging central banks and governments to respond to a fast-changing situation, according to the OECD. As central banks around the world try to calm a market panic, the Paris-based group also warned of possible global contraction this quarter. It cut its full-year growth to just 2.4 per cent from 2.9 per cent, which would be the weakest since 2009. Global manufacturing contracted in February by the most since 2009 as the coronavirus severely disrupted demand, trade and supply chains. The JPMorgan Global Manufacturing PMI fell 3.2 points to 47.2, snapping a three-month streak of expansionary readings, according to a report released Monday. Production plunged the most in almost two decades while the measure of new export orders also fell to the lowest since 2009.

What you need to know
  • Nine times more new virus cases outside than in China in the last 24 hours, says WHO
  • Containment is still possible, the head of WHO said, urging countries not to give up
  • Second death reported in the US, and more infections have been detected
  • The European Union sounds high alert
  • Air India quarantines crew of the flight on which a COVID-19 patient flew to Delhi
  • Iran cases surge 50%, top 1,500; 4,335 infected in South Korea
  • Saudi Arabia, New York City, Brussels, Berlin report first cases
  • Coronavirus kills an adviser to Iran’s Ayatollah Khamenei
  • Italy death toll jumps to 52
  • Chinese institute says African swine fever vaccine effective in lab tests
  • G-7 finance chiefs, central bankers plan virus call on Tuesday
  • Sweden bans Iran flights over coronavirus

First Published: Tue, March 03 2020. 01:06 IST