India GDP to shrink by 4.5% in 2020 due to Covid-19 pandemic: Dun & Bradstreet report

Mumbai: Covid-19 pandemic is set to impact the India growth story and the country’s gross domestic product (GDP) could in fact shrink in 2020, as per a Dun & Bradstreet global report.

India could witness a negative growth of 4.5% in 2020 fiscal, but could grow at a healthy growth rate of 6.3% in 2021 fiscal, Country Risk & Global Outlook report by Dun & Bradstreet released in August said.

The global outlook report juxtaposes the global growth vis a vis Corona pandemic and how various countries are dealing with it. As per the report none of the Asian countries including India, Japan, China or Singapore saw a rating upgrade.

Eleven countries including Albania, Bosnia & Herzegovina, Croatia, Cyprus, Czech Republic, Denmark, Hungary, Romania, Slovakia, Spain and Uruguay witnessed a rating upgrade globally.

“In India, demand will remain depressed by unanticipated lockdowns at state level and in the containment zones. This also raises uncertainty among manufacturers and suppliers who had planned to resume their operations as the government opened up the economy in three phases. The presence of persistent high inflation along with high unemployment and subdued demand pose policy challenges for both RBI and the government.” said Dr Arun Singh, Global Chief Economist, Dun & Bradstreet.

The report goes on to say that Asian countries as a whole would take time before the growth comes back. “Despite new clusters of outbreaks even in countries with enviable disease control such as Vietnam and China, East and Southeast Asia are tentatively looking past the first shock of the pandemic to the consequences of so much monetary and fiscal loosening, the end of old growth drivers such as tourism, and new ones in the form of next-wave technologies,” the report said.

As per the report China would grow at 2% in 2020 fiscal and 5.5% in 2021 fiscal. US GDP would shrink by 5.3% in 2020 fiscal as against 2.9% growth in 2021 fiscal. Japan's growth rate too would dip to negative 5.6% in 2020 as against 1.3% growth in 2021 fiscal, the report said.