The Reserve Bank of India (RBI) has estimated that the Gross Domestic Product (GDP) for 2020-21 is likely to be negative, in the Governor's statement, while releasing the Monetary Policy today.
"As regards the outlook for growth, the MPC noted that the recovery of the rural economy is expected to be robust, buoyed by the progress in kharif sowing. Manufacturing firms expect domestic demand to recover gradually from Q2 and to sustain through Q1:2021-22. On the other hand, consumer confidence turned more pessimistic in July relative to the preceding round of the Reserve Bank's survey," an RBI statement said.
According to the country's central bank, external demand is expected to remain anaemic under the weight of the global recession and 5 contraction in global trade.
"Taking into consideration the above factors, real GDP growth in the first half of the year is estimated to remain in the contraction zone. For the year 2020-21 as a whole, real GDP growth is also estimated to be negative. An early containment of the COVID-19 pandemic may impart an upside to the outlook. A more protracted spread of the pandemic, deviations from the forecast of a normal monsoon and global financial market volatility are the key downside risks," the Governor's statement said.