India Economic Forecast

India Economic Outlook

May 26, 2020

The economy is likely contracting sharply in Q1 FY 2020, which runs from April to June. The government announced on 18 May that it was extending the national lockdown—which has been in place since 25 March to curb the spread of coronavirus—for a fourth time up until 31 May, although states have been given more control over re-opening their respective economies. Economic data paints a grim picture: The private-sector PMI slumped in April to the lowest reading since current records began in December 2005, while industrial production plunged year-on-year in March at the fastest pace since at least April 2006. Exacerbating matters, Cyclone Amphan caused severe damage to life and infrastructure in the north east in late May. Meanwhile, Prime Minister Narendra Modi announced on 12 May that total fiscal and monetary policy stimulus now amounts to 10% of GDP.

India Economic Growth

The economy will suffer in FY 2020 due to containment measures and weaker external demand. A major downside risk is a significant prolongation of the national lockdown. More positively, fiscal stimulus should support activity, as should looser monetary policy, although the fiscal deficit will spike in tandem. Our panelists project GDP to fall 0.2% in FY 2020, which is down 1.6 percentage points from last month’s forecast, and increase 7.2% in FY 2021.

India Economy Data

2015 2016 2017 2018 2019
Population (million)1,2831,3001,3171,3341,352
GDP per capita (USD)1,6331,7662,0182,0232,113
GDP (USD bn)2,0962,2952,6572,6992,857
Economic Growth (GDP, annual variation in %)  
Consumption (annual variation in %)  
Investment (annual variation in %)  
Industrial Production (annual variation in %)
Public Debt (% of GDP)68.868.769.469.471.9
Money (annual variation in %)11.56.721.814.310.3
Inflation Rate (CPI, annual variation in %, eop)
Inflation Rate (CPI, annual variation in %)
Inflation (PPI, annual variation in %)-
Policy Interest Rate (%)6.756.
Stock Market (annual variation in %)-9.416.911.317.3-23.8
Exchange Rate (vs USD)66.2564.8665.1169.1975.34
Exchange Rate (vs USD, aop)65.4267.0464.4669.9170.91
Current Account (% of GDP)-1.1-0.7-1.8-2.1-  
Current Account Balance (USD bn)-22.1-15.2-48.7-57.0-  
Trade Balance (USD billion)-117.3-108.9-158.6-182.3-153.5
Exports (USD billion)262275305331314
Imports (USD billion)379384463513467
Exports (annual variation in %)-
Imports (annual variation in %)-15.31.320.510.7-8.9
International Reserves (USD)356373421414476
External Debt (% of GDP)23.120.519.920.1-  

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India Facts

Value Change Date
Bond Yield6.50-0.04 %Jan 01
Exchange Rate71.23-0.09 %Jan 01

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