India's full year GDP to decline by 10 percent: analyst
The sliding Indian economy is mainly due to the ravaging COVID-19 epidemic and other factors such as the small portion that the “new economy” takes up in the nation's growth momentum and the rise of anti-globalization and protectionism in the South Asian country, analysts said.
From July to September, India's services, mining, construction and trade continued to decline, while manufacturing and agriculture saw slight annual growth.
From April to June, India’s economy registered a record 23.9 percent drop amid lockdowns due to the coronavirus, according to MOSPI.
Qian Feng, director of the research department at the National Strategy Institute at Tsinghua University, told the Global Times on Sunday that the health crisis has amplified long-existing problems in India’s economic structure.
“Manufacturing is a weakness, while the services industry is mainly labor intensive, most of which is casual laborers, who are among the soaring unemployment,” Qian said.
Qian remained pessimistic toward India's economic growth in the October-December quarter, projecting the full year's GDP growth will decline by 10 percent.
According to an economic outlook released by the IMF in October, India's economic growth this year will plunge 10.3 percent on a yearly basis, a bigger loss than the outlook of a negative growth of 5.8 percent made in June.
If the IMF forecast is accurate, India will see the first negative GDP growth since 1979, according to data from World Bank.
Analysts said that India's GDP may also contract next year as the COVID-19 epidemic in the country is far from under control, and the $10 billion stimulus package announced by the Indian government in October is far from enough.
In emerging markets and developing economies, inflation declined sharply in the initial stages of the COVID-19 pandemic, although it has since picked up in some countries including India, reflecting supply disruptions and a rise in food prices, read the IMF outlook.
As India has recently rolled out measures to grow its own industries and reduce reliance on foreign investment -- especially by setting up curbs to Chinese investment -- they will only harm its own development in the long run, Qian noted.
Such political gestures at this crucial moment in the COVID-19 pandemic will not help India out of the health crisis, according to Qian.
In its latest wave to crack down on Chinese firms, India banned 43 apps mostly Chinese-developed earlier this month, include Alibaba's e-commerce app Aliexpress and DingTalk, an enterprise communication and collaboration platform that has been popular during the pandemic.
“Compared with the developed new digital economy supported by the internet in China and the US, India’s new economy has not grown strong and big enough to support its real economy to tide through difficulties,” Qian added.