RBI admits GDP forecasts prior to coronavirus outbreak were off the mark

RBI failed to gauge a greater-than-anticipated contraction in gross-fixed capital formation and continuing weak activity, especially in the rural areas.

The Reserve Bank of India, in its April Monetary Policy Committee (MPC) report on Thursday, admitted it had failed to gauge the extent of the slowdown in India, even before the Covid-19 pandemic, primarily due to a greater-than-anticipated contraction in gross-fixed capital formation and continuing weak activity, especially in the rural areas.
 

According to the official data, gross domestic product (GDP) growth for third quarter of 2019-20 (October-December) came in at 27-quarter low of 4.7 per cent. The GDP growth for the second quarter (July-September) was revised upwards to 5.1 per cent from 4.5 per cent. In its October 2019