MUMBAI: The 19-day extension of the lockdown by led analysts to flag concerns over its economic impact, with some estimating a GDP contraction of 1% in FY21 as well. Icra said there is a possibility of the GDP contracting by 1% in the just started fiscal year 2020-21, while Japanese brokerage Nomura said it will de-grow by 0.5% for 2020.
British peer Barclays said GDP will be stagnant with zero growth for the calendar year. The government had unveiled a Rs 1.7 lakh crore relief package right after announcing the national lockdown last month, but analysts have been near-unanimous in calling it insufficient.
Some also said less than half of the package was actually new, as a majority of the relief was already announced in the Budget. Barclays said the extension of the lockdown will have an incremental USD 114.4 billion impact on the economy, taking the total value of the pain to USD 234.4 billion because of the 40-day lockdown.
Reflecting the same, Icra said there are chances of a contraction of up to 15% in the GDP during the ongoing April-June quarter, which will result in the fiscal growth coming in between 1% to (-) 1%.
"The size of the GDP shrinkage would be contingent on the extent to which a graded resumption in activities is permitted in some areas post-April 20th and the magnitude by which government spending is stepped up to cushion the blow from the lockdown," it said.
