Goldman Sachs and Bernstein, have predicted that “India will experience its deepest recession ever.” The forecasts came as the Indian government had extended the country’s nationwide lockdown until May 31 while easing some restrictions to boost economic activity during the coronavirus crisis.
Goldman Sachs India Securities’ chief economist Prachi Mishra and chief Asia economist Andrew Tilton estimated that India’s gross domestic product (GDP) will contract by an annualized 45% in the second quarter compared to the prior quarter. The firm previously forecasted a slump of 20% for the country with approximately 1.4 billion people. Goldman Sachs’ estimates imply that India’s real GDP will plunge by 5% in the 2021 fiscal year, deeper than any other recession the country has ever experienced.
“The deeper trough in our Q2 forecasts reflects the extremely poor economic data we have received so far for March and April, and the continued lockdown measures, which are among the most stringent across the world.” the firm said.
On the other hand, analysts at Bernstein have forecasted an even sharper contraction of 7% for India. Goldman Sachs’ economists predict a rebound of 20% for recovery.