08.31.20 - India's economy contracted at the fasted pace ever in the three months following June as the lockdowns imposed due to the COVID-19 pandemic hit the countries consumer base and investments hard.
The economy shrank 23.9% in those three months. India’s economy is the fifth-largest in the world and many economists say the slump was worse than expected. India’s economic woes are currently among the worst in the world due to the pandemic.
Investment within the country fell by 47% compared to last year and household consumption dropped by almost 27%, according to Capital Economics. Government spending increased by 16% but the decline in activity in other sectors of the economy rendered this as not enough as India has rapidly fallen into a serious recession.
Capital Economics stated that the second quarter should mark the low point for India's economy, but many analysts believe the recovery could be very slow.
"The continued rapid spread of the coronavirus will dampen domestic demand," said Shilan Shah of Capital Economics. "What's more, the underwhelming fiscal response to the crisis will guarantee a legacy of higher unemployment, firm failures, and an impaired banking sector that will weigh heavily on investment and consumption."
Source: Yahoo Finance
