Upcoming Webinar:Join us for Sustainability 100+ Dialogues 2021-Maharashtra Roundtable& know how the state is progressing on climate action

Coronavirus pandemic | India's GDP to contract by 6.1% in April-June: Nomura

The economy will grow at 3.2 percent in the January-March period and contract by 6.1 percent (June quarter) and 0.5 percent September quarter, before rising by 1.4 percent in the last quarter of the calendar year, it said.

April 13, 2020 / 07:12 PM IST

The Indian economy will contract by 6.1 percent in the April-June quarter and is likely to expand only in the December quarter, a Japanese brokerage said on Monday, expecting another 0.75 percent cut in rates by the RBI to push growth in 2020. The conventional approach to rate setting which involves a sharp focus on inflation will take a backseat and growth concerns will be accommodated, Nomura said in a report after the monetary policy committee (MPC) minutes were made public.

The economy will grow at 3.2 percent in the January-March period and contract by 6.1 percent (June quarter) and 0.5 percent September quarter, before rising by 1.4 percent in the last quarter of the calendar year, it said.

It can be noted that the COVID-19 crisis has resulted in a three-week lockdown of India, which may also be extended further to arrest the spread of infections. The likely economic impact had resulted in the RBI advancing its bi-monthly policy review meet by a week and slashing rates by 0.75 percent and easing out liquidity in late March.

"We believe the 'conventional' flexible inflation targeting framework will take a backseat in forthcoming policy meetings and members will be keen to look through near-term inflationary pressures, as rescuing growth and maintaining financial stability will emerge as the overwhelming priority," the brokerage said.

More unconventional policy measures are set to follow, it said, adding that the RBI will cut its key rates by a further 0.75 percent till December.

Close

COVID-19 Vaccine

Frequently Asked Questions

View more
How does a vaccine work?

A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

How many types of vaccines are there?

There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.

What does it take to develop a vaccine of this kind?

Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.

View more
Show

Also read: COVID-19 | How to maximise food security in post-COVID India

At their next meeting in June, members of the MPC will confront the deteriorating impact of the lockdown, it said, adding that food prices have spiked in April and the inflationary pressures may not immediately abate.

There will be a rate cut of at least 0.25 percent in June and the MPC may choose to frontload more policy easing in view of growth risks, it said.

The unconventional policies accompanying the rate cut will include a commitment towards aggressive open market operations, further liquidity injections via targeted long term repo operations and further forbearance measures, it said.

Follow our full coverage of the coronavirus pandemic here.
PTI
first published: Apr 13, 2020 07:10 pm

stay updated

Get Daily News on your Browser
Sections
ISO 27001 - BSI Assurance Mark