India to See Worst Recession, GDP to Shrink by 45%: Goldman Sachs

The economists predict that the economic package won’t have much of an impact in the short run.

India’s GDP projection has taken a significant hit due to the coronavirus outbreak.

(Photo: Altered by The Quint)

A recent note by Goldman Sachs economists has said that the Indian government’s efforts to boost the economy is more focussed on the medium-term impact over immediate support, as per a report by Bloomberg Quint.

Speaking of the reforms, the economists in their note said, “These reforms are more medium-term in nature, and we, therefore, do not expect these to have an immediate impact on reviving growth. We will continue to monitor their implementation to gauge their effect on the medium-term outlook.”

Their report also predicts that India’s Gross Domestic Product (GDP) will contract by an annualised 45 percent in the second quarter from prior three months or the June quarter.

The Bloomberg report states that Goldman’s earlier forecast for the second quarter was a 20 percent slump. India might be at the receiving end of the deepest recession so far.

A 20 lakh crore relief package had been announced by the government to aid citizens due to the impact of the coronavirus, but the Goldman Sachs economists predict that this won’t have much of an impact in the short run.

They said that the prediction has been made factoring in the extension of the lockdown, workforce constraints etc.

(With inputs from India Today)