Pubblicato in: Banche Centrali, India, Senza categoria

India. Pil Q1 annualizzato 4.2%. Ma il Q2 potrebbe essere negativo.

Giuseppe Sandro Mela.

2020-06-03.

India 013

Pil del primo trimestre, Q1, annualizzato sarebbe 4.2%, riflettendo almeno in parte il ritardo con cui il Covid-19 ha epidemizzato il paese.

«India’s economy slows in March quarter, with worse to come»

«India’s economy grew at its slowest pace in at least eight years in the January-March quarter as the COVID-19 pandemic weakened already sluggish consumer demand and investments»

«Asia’s third-largest economy grew at a faster-than-expected 3.1% in the last quarter, compared with 5.7% a year ago, government data showed on Friday»

«The weakness in manufacturing, construction, trade, hotel, transport, and real estate was clearly visible in the Q4FY20 data»

«The economy had clearly slowed down even before COVID-19 hit India»

«This, in some sense, serves as the warning for the deep slump due in Q1 of FY21. The investment contraction along with an extremely weak private consumption segment will pull Q1 of FY21 into a deep contraction. FY21 real GDP growth will likely be around (-)5.8% though much of the estimation remains in some flux»

«The sharp deterioration of economic performance in FY20 can’t be attributed to 10 days of lockdown in March»

«However, stricter form of lockdown and an uncertainty about its duration will certainly push the country into a deep recession that was not witnessed in several decades»

«While the level of stress during the lockdown period is often high for the lower strata of the economy, with meaningful and targeted policy support, these segments can potentially recover quickly once economic activities normalise and lead the recovery»

«Q4 GDP print came in higher than most economists’ estimates at 3.1%. On the output front, agriculture and mining sectors seem to have held fort»

«Private consumption, gross fixed capital formation and net exports have been disappointing»

* * * * * * *

Il sistema economico indiano aveva già dato segni di rallentamento nel corso dello scorso anno. Se in passato il pil cresceva al ritmo del 6% – 7%, a partire dallo scorso febbraio ha evidenziato una crescita sempre alta, ma decrescente.

Adesso che l’epidemia da Covid-19 inizia a dispiegarsi le attese sono di conseguenza più severe, e nessuno si stupirebbe se il pil del Q2 fosse sostanzialmente negativo.

*


India’s economy slows in March quarter, with worse to come.

India’s economy grew at its slowest pace in at least eight years in the January-March quarter as the COVID-19 pandemic weakened already sluggish consumer demand and investments.

Asia’s third-largest economy grew at a faster-than-expected 3.1% in the last quarter, compared with 5.7% a year ago, government data showed on Friday.

A Reuters poll of economists had forecast a growth rate of 2.1% for the March quarter, compared with a downwardly revised 4.1% rise in the October-December period in 2019.

COMMENTARY

“Real GDP growth of 3.1% was in line with our expectation of 3.4%, especially considering the volatility in the last two weeks of March. The weakness in manufacturing, construction, trade, hotel, transport, and real estate was clearly visible in the Q4FY20 data.

The economy had clearly slowed down even before COVID-19 hit India. The contraction in investment was visible in the pre- COVID-19 period too.

This, in some sense, serves as the warning for the deep slump due in Q1 of FY21. The investment contraction along with an extremely weak private consumption segment will pull Q1 of FY21 into a deep contraction. FY21 real GDP growth will likely be around (-)5.8% though much of the estimation remains in some flux.”

*

“All important activity indicators of the economy — production of coal, crude oil or cement or sales of commercial vehicles or cargo handled at airports or rail freight, etc. — have witnessed a sharp decline in FY20.

The sharp deterioration of economic performance in FY20 can’t be attributed to 10 days of lockdown in March. However, stricter form of lockdown and an uncertainty about its duration will certainly push the country into a deep recession that was not witnessed in several decades.

It will be a formidable challenge for policymakers to tackle both the health and economic challenges simultaneously in FY21.”

*

“The Q4 FY20 GDP growth at 3.1% y/y came in somewhat better than the Street’s expectation, while the broadly-in-line FY20 GDP growth of 4.2% reflects significant downward revisions in previous quarters of the financial year.

Given the prolonged lockdown in the economy and a sudden stoppage in economic activities, Q1 FY21 is set to sink deep into the negative zone. The full-year growth for FY21 is likely to remain materially negative as well, hitting a multi-decade low.

The role of the RBI’s TLTROs and the recently-announced measures by the government will likely hold the key in this context. It is critically important to provide focused support to the lower end of the socio-economic pyramid.

While the level of stress during the lockdown period is often high for the lower strata of the economy, with meaningful and targeted policy support, these segments can potentially recover quickly once economic activities normalise and lead the recovery. We expect continued support in areas such as microfinance, MSMEs, and affordable housing.”

*

“India’s Q4 FY20 GDP growth slowed down to 3.1% yoy, much higher than ours (2.0%) and market expectations (1.6%). This, however, is barely a consolation.

We expect the data for the quarter to be revised down as we get better sense of the actual economic activity going forward by which time more comprehensive data flows in.

Given that the initial sample size for data collection for March for various high-frequency indicators is much lower than the actual sample size, we feel that the pain in the economy, especially that which was undergone by the MSMEs are not truly reflected in the current data.

There is a probability that the impact of the week-long lockdown in March is not necessarily fully priced in, in the GDP data.”

*

“Q4 GDP print came in higher than most economists’ estimates at 3.1%. On the output front, agriculture and mining sectors seem to have held fort. On the expenditure front, government spending seems to have saved the day.

Private consumption, gross fixed capital formation and net exports have been disappointing. There have been material downward revisions in previous quarters’ GDP prints, resulting in GDP growth for FY20 coming in at 4.2%.

April core sector data came in at -38.1%, the worst print ever. Most of the negativity has already been priced in and markets are braced for a shocker of a GDP print in Q1 FY21 as well.

Going forward, markets are more likely to focus on leading and high-frequency indicators to get a sense of the pace of recovery once restrictions on movement are eased. They would be closely tracked alongside the novel coronavirus cases’ curve.”