India Could Lose 4% GDP Permanently Due to COVID-19: Crisil Report

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

(Photo: Altered by The Quint)

The economic disruption amid novel coronavirus pandemic is likely to result in a permanent loss of 4 percent GDP for India, said a report by Crisil Research.

This means that even when the economy recovers, there will be a certain amount of economic activity that will not be recovered, and this is estimated to be at 4 percent of GDP, reported The Indian Express.

The impact is likely to be worse than that of the 2008 global financial crisis, said Crisil's Chief Economist Dharmakirti Joshi. The report further claimed that India can recover the lost ground of GDP by financial year 2024, provided it grows at an average of 8.5 percent for the next three years.

The recovery, again, will be different for various sectors. The report said that while FMCG sector will see mild impact and quick recovery, others like passenger vehicles, will see a sharp decline and moderate recovery. It will, however, take a long time for hotel and airline sectors to recover, the report added.

Earlier in April, domestic rating agency cut its projections for India’s economic growth rate to 1.8 percent, from 3.5 percent it had earlier predicted for 2020-21.