In the wake of Indian government kickstarting the corrective measures in the rescue of the plummeting economy, Investment bank Goldman Sachs dropped a forecast which shook the grounds of Indian investors. While elite institutions like WHO stating that novel coronavirus may be here to stay for a longer time, the American multinational financial services company forecasting that India will pay a heavy price for its prolonged 55-day lockdown.
Despite the massive economic package announced the Modi-led government, Goldman Sachs in a detailed study stated that India might soon experience its deepest recession since 1979. According to the study, the stimulus package is speculated to being only medium relief or even may not be enough to bring about any immediate relief.
However, Goldman Sachs added that India’s GDP will rebound by 20% in the third quarter of the year once economic activities are back on track. It also retained the projections for the fourth quarter and the next year’s first quarter at 14% and 6.5%. This has come as a warning sign to the government which has been trying hard to maintain a balance between health and economics.
Meanwhile, British brokerage firm Barclays Research claimed the Indian government’s balance sheet will bear only 1.5 trillion rupees (0.75% of GDP) worth of expenditure from the proposed 20 trillion rupee package. As per their claims, the rest will come from the Reserve Bank of India’s liquidity measures, amounting to 8.1 trillion rupees, government guarantees, food stocks or the non-fiscal, non-monetary measures proposed.