India’s gross domestic product (GDP) is likely to contract 4.5% in the current fiscal year, according to the Ministry of Finance’s Macroeconomic June 2020 report. The report stated that the economy will see a 6.4% plunge in the GDP number as compared to the April 2020 forecast.

The shrinkage in the GDP number is predicted by the International Monetary Fund citing “unprecedented COVID-19-induced supply-demand shocks.” 

“Given the immense uncertainty associated with infection and macroeconomic recession curves of countries across the world, IMF, in its World Economic Outlook (June 2020) report, has downward revised global growth to (–) 4.9 per cent in 2020, 1.9 percentage points lower than its April 2020 forecast,” the report stated.

It further added, “All regions across the world are projected to experience negative growth in 2020, the first time in history. While advanced economies are projected to contract by 8 per cent in 2020, 1.9 percentage points lower than the April forecast, growth in emerging market and developing economies has been forecast at -3.0 per cent, a downward revision of 2 percentage points.”

As per the provisional estimates released by the National Statistical Office, India’s original GDP growth rate was 4.2% in 2019-20, in comparison to 6.1% in the previous year.

The economic report for June comes just days after the government announced Unlock 2.0 to ease some of the restrictions imposed in March to curb the spread of coronavirus, which has pushed the economy into a standstill with thousands of job losses in the country.

Read the full report here: https://dea.gov.in/sites/default/files/May%202020_2.pdf