Mumbai. The ‘lockdown’ imposed by the states in April and May to control the second wave of the corona virus epidemic may lead to a decline of 12 percent in the economy in the June quarter of the current financial year 2021-22, compared to the same quarter a year ago. The economy had declined by 23.9 percent in
Switzerland-based brokerage company UBS Securities said this in a report. Last year, the two-and-a-half-month nationwide ‘lockdown’ imposed at the central level at just four hours’ notice had hit the economy hard and contracted by 7.3 per cent in the financial year 2020-21.
In the first quarter, it had a very adverse effect and the GDP declined by 23.9 percent. The situation improved slightly in the second quarter and the economy contracted by 17.5 per cent. However, the second half saw a rapid revival. The growth rate in the third quarter of the year stood at 0.4 percent. In the fourth quarter, it increased to 1.6 percent.
This limited the overall decline at 7.3 per cent in 2020-21. Swiss brokerage company UBS Securities India has said in a report that a 12 per cent fall in the current financial year 2021-22 will make it difficult for the economy to grow in a V (rapid growth after a fall) shape this time around, as seen last time in the national capital. The level was seen after the ‘lockdown’ was lifted. He said the reason for this is that consumer sentiment remains weak this time as people are more worried about the impact of the second wave of the pandemic than last year.
Swiss brokerage economist Tanvi Gupta Jain, citing internal data from UBS India, said that whatever the indicators are, they point to a 12 per cent decline in the economy in the quarter ended June 2021. This situation is when the indicator improved by 3 percent on a weekly basis to 88.7 for the week ending June 13 due to the easing of local restrictions in various states from the last week of May. However, the brokerage company has expected better economic activity on a monthly basis from June. But the momentum in the economy will probably be seen only from the second half.
He said that there was a rapid growth after the fall in 2020, but this time it is not likely to be like that. There will be a gradual revival of the economy this time as consumer sentiment remains weak due to the uncertainties associated with the pandemic. According to the economist, consumer and business confidence is likely to increase with the pace of vaccination. This is expected to accelerate the economic revival from the second half. (agency)