Coronavirus effect: OECD lowers India’s FY21 GDP growth to 5.1% on virus concerns

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Published: March 2, 2020 9:52:56 PM

The OECD said the adverse impact on confidence, financial markets, travel sector and disruption to supply chains contributes to the downward revisions in all G20 economies in 2020, particularly ones strongly interconnected to China.

India is a member of G20, a grouping of developed and developing economies. (Reuters)

Global agency OECD on Monday lowered its India’s GDP growth forecast to 5.1 per cent from the earlier projection of 6.2 per cent for 2020 on concerns of impact of deadly coronavirus 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 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 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 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 financial year starting April 1.

The National Statistical Office (NSO) estimates India’s GDP growth at 5 per cent during 2019-20. OECD has projected the growth at 4.9 per cent for the financial year ending March 2020. The report said coronavirus (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. Meanwhile, India has reported two new cases of the novel coronavirus, including one from the national capital, the Union Health Ministry said as the government stepped up its efforts to detect and check the infection, which has killed more than 3,000 people globally.

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