Barclays revises India's FY21 GDP growth forecast to -6.4%

by Nidhi Bhati

Investment bank Barclays stated that India’s GDP may shrink to 6.4 per cent in 2020-21 amid the Covid-19 pandemic as against a six per cent contraction estimated earlier. Barclays expects the country’s GDP to shrink by 8.5 per cent in the September 2020 quarter. However, it expects growth to recover in the third quarter of the current financial year by 0.4 per cent, a quarter earlier than the Reserve Bank of India (RBI)’s projection. The prospect of an effective vaccine in the near future and high seroprevalence of antibodies across the population support the case for a more durable economic recovery. Stating that India would return to normal faster than expected, Barclays further revised its growth projection for 2021-22 to 8.5 per cent from seven per cent estimated earlier.