Unprecedented Contraction of India’s Economy Due to Corona Crisis

India’s economy recorded a historic contraction of 23.9 percent in the second quarter compared to a year earlier.

 

The Indian economy, one of the largest in Asia, was hit hard by the outbreak of the coronavirus and the massive lockdown measures against the pandemic that paralyzed public life to a great extent.

It is the most substantial downturn since the quarterly measurements began in 1996, the Indian government said. Moreover, the figure turned out significantly worse than expected, because economists had, on average expected a minus of 18 percent.

Virtually all economic sectors were poor, such as construction, mining, trade, industry, tourism and the financial industry. Growth was only seen in agriculture. India is now on track for the first annual economic contraction in more than 40 years.

To stimulate the economy, the Indian central bank has cut interest rates several times this year, and the government announced support packages.

India is now becoming an epicentre for new corona infections. On Sunday, more than 78,000 new infections were reported. The total number of infections in the country, with more than 1.3 billion inhabitants is approaching 4 million.

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