India’s economy grew at its slowest pace in at least two decades last quarter, government data showed on Friday, with warnings of far worse to come as it grapples with the fallout of the world’s largest coronavirus lockdown.
Asia’s third-largest economy expanded by just 3.1 per cent in the January-March period, which coincided with the first week of a months-long shutdown.
Annual growth was 4.2 per cent, its slowest pace since the 2008 global financial crisis.
But the quarterly figures beat gloomy forecasts, with Bloomberg News predicting growth would slow to just 1.6 per cent.
The finance ministry said in a press release that the estimates were ‘likely to undergo revision’ due to a lack of available data following the lockdown.
But the current quarter is expected to reflect a severe contraction as manufacturing, services and consumption came to a grinding halt.
The lockdown is widely expected to plunge the country into recession, with Goldman Sachs predicting a 45 per cent contraction in the April-June quarter from the previous year.
The central bank has also warned of a ownturn and slashed rates to spur lending.
Even before prime minister Narendra Modi announced a shutdown in late March, the economy was struggling to gain traction with sluggish growth, record unemployment and a flurry of bad loans making banks reluctant to lend.
Earlier this month Modi announced a $266 billion package — 10 per cent of the country’s GDP — to revive the battered economy.
But with migrant workers having fled home to their villages due to a lack of food and money, and factories struggling with labour shortages, few expect economic activity to pick up soon.
India’s coronavirus death toll passed neighbouring China’s on Friday, with 175 new fatalities in 24 hours taking the total to 4,706, according to official data.
India, home to some of the world’s most packed cities and a creaking healthcare system, is emerging as a new hotspot with record jumps in new cases in recent days.
Want stories like this in your inbox?
Sign up to exclusive daily email
More Stories from Miscellany