Macroeconomic report by Finance Ministry 2020
India imposed a strict lockdown from 25th March 2020. April 2020 was the month of an economic standstill with restrictions on various activities eased in May 2020. As restrictions were further eased, the country entered the unlock phase in June 2020.
THE SUPPLY & DEMAND SIDE SHOCK
The loss of economic output from more than two months of lockdown was down first triggered from the supply side as labor stayed away from work.
The demand side caused further loss of output as consumption of goods and services dependent on customer mobility fell.
This twin supply–demand shock on output subsequently led to the loss of income, which caused a further decline in consumption resulting in further loss of output.
Owing to this unprecedented COVID – 19 induced supply-demand shocks, IMF’s June 2020 WEO update projects growth of India’s output at (-)4.5% in 2020-21 and
that of the world at (-)4.9%.
While the biggest reason for the unprecedented contraction is the lockdown forced by the pandemic, economic growth had been slowing down even before that.
For more information visit: https://dea.gov.in/
*image source from Google
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