According to a latest update from the Asian Development Bank (ADB), the Indian economy is expected to contract by 4.0% in fiscal 2020, then grow by 5.0% the following year as economic activity normalizes gradually. Growth in Indian GDP slowed to 3.1% in the last quarter of fiscal year 2019 (FY2019, ended 31 March 2020), its slowest since early 2003. Economic growth slowed to 4.2% in the whole of FY2019 as both exports and investment started to contract.
High-frequency indicators such as purchasing managers' indexes fell to all-time lows in April, reflecting the bleak outlook. Migrant workers have gone home to their villages after losing their jobs in the cities and will be slow to return even after containment measures are relaxed. GDP is expected to contract by 4.0% in FY2020 before rebounding by 5.0% in FY2021.
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