The Indian economy is the worst-hit among major economies, American brokerage Goldman Sachs said on Tuesday, sharply cutting its FY21 GDP forecast to a contraction of 14.8%.

It had earlier estimated that the economy of the country, which is now home to the second-largest number of COVID-19 infections, to contract by 11.8%.

The estimate comes days after official data said the economy contracted by 23.9% for the June 2020 quarter, as activity across all sectors barring agriculture contracted due to the lockdowns. The nearly two-month-long lockdowns chilled economy activity but was unable to contain the number of infections, which stands at 40 lakh.

“India’s GDP hit from COVID-19 [is] the highest across major economies,” analysts at the brokerage wrote. They now believe that the economy will contract 13.7% for the September quarter and 9.8% for the December quarter, compared with the 10.7% and 6.7% contractions, respectively, estimated earlier. “Our estimates imply that real GDP falls by 11.1% in 2020, and by 14.8% in FY21,” they added.

Most pessimistic

The 14.8% contraction is among the most pessimistic of all the analyst estimates till now. Earlier, analysts at India Ratings and Research revised down their estimate to an 11.8% contraction for FY21, while economists at India’s largest lender SBI are now expecting a 10.9% contraction.

The brokerage said there would be a sharp rebound in FY22 due to the low base.

It estimated GDP growth of 15.7% in the next fiscal. Assuming 70% of the output lost in June is recovered in June 2021, they expect real GDP growth of 27.1% in the April-June 2021 quarter.