NEW DELHI – India’s economy is on a sharp decline with its gross domestic product (GDP) shrinking by at least 7.7%, lowest since 1952.
According to economists surveyed by Bloomberg, the decline in GDP for the year ending in March 2021 will be steeper than the 7.5% drop forecast by the Reserve Bank of India. The economists attribute this drop to the rapid spread of coronavirus cases and measures to contain them that hurt businesses and households.
The Indian Ministry of Statistics admitted that the “estimates may undergo sharp revisions due to disruptions caused by steps to contain the pandemic.” data collection was suspended coinciding with a nationwide lockdown.
Despite one of the strictest coronavirus lockdowns, India is now home to the world’s second-highest virus infections — which at more than 10.4 million, has kept the government from fully reopening the economy. The contraction in the nation’s GDP will also be the first since 1980, when the economy shrank 5.2%, and is set to be the worst slump in South Asia.
India is expected to further suffer significant burden on its economy as calls are growing for the Covid vaccine inoculation drive to be complemented by more support from fiscal and monetary policy makers. India granted emergency approval for the vaccine developed by AstraZeneca Plc and the University of Oxford earlier this month, to pave the way to begin vaccinating its population.
With 10.4 million confirmed coronavirus cases, India has the second-highest total behind the United States. The government of India is planning to kick off a vaccination drive on Jan. 16 to stem COVID-19 in the world’s second-most populous country that has so far reported almost 150,800 virus-related deaths during the pandemic.