India’s GDP to shrink 7.5% if Covid-19 vaccine is delayed : Bank of America Securities

GDP Shrink

On Monday, a foreign brokerage revealed, an endless halt for a vaccine against coronavirus may direct to a reduction of up to 7.5 per cent in the Indian GDP in FY21.

Economists at Bank of America Securities also revised down their base case estimates on the real GDP within a week, and now expect it to contract by 4 per cent because of a drop in economic activity.

It can be perceived that recurring attempts to find a vaccine against the deadly virus are on both globally as well domestically, but no timelines have been declared yet.

However, many analysts are anticipating the Indian economy to shrink by 5 per cent in FY21 as a result of the ongoing nationwide lockdowns, with some also predicting a reduction of up to 7.2 per cent in the GDP.

“India’s real GDP will possibly decline by 7.5 per cent if the global economy has to wait for a vaccine discovery for a year,” the BofA analysts confirmed, calling this as the “bear case”.
A base case is the most expected case while a bear case indicates a sure shot pessimistic case.

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