India: More growth pain – Standard Chartered

Economists st Standard Chartered Bank revise the Indian  FY21 GDP growth forecast to -4% from -2% on extension of the lockdown. USD/INR is trading at 75.7232.

Key quotes 

“We lower our FY21 (year ending March 2021) real GDP growth forecast to -4.0% from -2.0%. For calendar year 2020, our real GDP growth forecast is now -7.5% versus our previous forecast of -4.6%. Our forecast revision is driven by two factors: extension of the lockdown and a smaller-than-expected fiscal support package.”

“We now revise our Q1-FY21 GDP growth forecast to -35% y/y from -22% previously. We expect recovery from Q2-FY21 onwards.”

“Given the downward revision in our FY21 GDP growth forecast, we also adjust our FY22 GDP growth forecast to 13% from 12% previously. A more favourable base effect, in our view, could boost FY22 GDP growth.”