India's economic condition amid the COVID-19 pandemic does not look rosy. While the BJP had recently predicted that India would register positive growth in 2020 and "retain its status of the fastest growing economy", this tweet does not seem to be ageing well.
India's GDP shrank by 23.9% in the April-June period of this year, and things look rather grim. "GDP at Constant (2011-12) Prices in Q1 of 2020-21 is estimated at Rs 26.90 lakh crore, as against Rs 35.35 lakh crore in Q1 of 2019-20, showing a contraction of 23.9 percent as compared to 5.2 percent growth in Q1 2019-20," read a press note from the Ministry of Statistics and Program Implementation.
While many have attributed this to the COVID-19 pandemic and consequent lockdowns that had forced most businesses to shut down for weeks, it must also be kept in mind that India is still grappling with the virus. And to be fair, this is not the GDP of India in 2020. This is merely the data from the first quarter of the financial year (from April 2020 to June 2020) and as such, things can definitely improve by the end of this year.
According to an IMF projection cited by the BJP on August 22, India is pegged to register the highest GDP growth in 2020 among major economies of the world.
"While the world continues to grapple with economic bloodbath with major economies projected to register negative growth in the aftermath of #COVID pandemic, India will be a shining spot with positive growth in 2020. It will also retain its status of the fastest growing economy," the party had tweeted.
This however is based on data from April 2020. It was published in mid-April, approximately at a time when India was in its first phase of lockdown.
More recently, on September 2, Gita Gopinath who is the Chief Economist of the International Monetary Fund took to Twitter to share further details.
"In Great Lockdown Q2 2020 GDP growth at historical lows. Graph puts G20 growth numbers on a comparable scale, quarter-on-quarter non-annualized. Should expect rebounds in Q3 but 2020 overall will see major contractions. China recovers strongly in Q2 after collapse in Q1," she writes.
Keep in mind that this is the April to June quarter, and that Q1 and Q2 have both been used since some countries begin their financial year from January. The chart shared by Gopinath compares the quarter on quarter non annualised percentage of GDP growth in 17 countries as well as the 27-nation EU block which has been counted as a single entity.
While China is the only country that has registered growth, India lands at the other end of the spectrum with the maximum contraction. The estimate puts India's growth percentage at -25.6%.
The latest IMF data has become a talking point for Opposition leaders as they criticise the Centre for the economic condition facing the country. It must also be mentioned that India has also taken loans worth several billion dollars from international agencies amid the pandemic. And while that may not have any immediate bearing to the GDP growth percentage, it is certainly an additional factor to keep in mind going forward.