IMF says Indian economy worst hit by Covid-19 among G-20 nations

IMF’s chief economist Gita Gopinath shared a graph on Twitter that shows India’s GDP posted a growth of -25.6% during the April-June period compared with the previous quarter – the deepest contraction among the G-20 countries.

Business Desk, ETV Bharat: International Monetary Fund’s (IMF’s) chief economist Gita Gopinath on Wednesday said that India has seen the worst contraction in gross domestic product (GDP) during the quarter ended June 2020 among leading world economies.

According to a graph shared by Gopinath on Twitter, India’s GDP posted a growth of -25.6% during the April-June period (Q2 of calendar year 2020) compared with the previous quarter (Q1) – the lowest among the G-20 nations.

The UK economy was the second most hit, with its GDP growing -20.4% in Q2. The US economy posted -9.1% growth, while the European Union (EU) grew -11.7% during the same period.

In contrast, China was the only economy that managed to rebound 12.3% in Q2 compared with Q1.

“In GreatLockdown, Q2 2020 GDP growth at historical lows. Graph puts G20 growth numbers on a comparable scale, quarter-on-quarter non-annualized,” Gopinath said in her tweet, adding: “China recovers strongly in Q2 after collapse in Q1.”

Gopinath reaffirmed fears when she said that countries should be ready to witness major economic contraction for full year 2020. “Should expect rebounds in Q3 but 2020 overall will see major contractions,” her tweet added.

Earlier this week, India’s official data released by the National Statistical Office (NSO) showed that GDP grew -23.9% in the June quarter compared with a year ago – the worst contraction on record.

The contraction was expected given the fact that the economy was under complete lockdown for most of the time during the quarter due to the Covid-19 pandemic. It started “unlocking” only from June, albeit in a phased manner, under which many states continued to be in full lockdown.

Commenting on the GDP data, former finance secretary Subhash Chandra Garg said that there is still some economic pain left for the Indian economy.

“We are not out of woods still. Indicators of economic performance of July and August 2020 suggest we might have contraction of about 12-15% in Q2 (July-September quarter),” he said on Twitter on Monday.