India: Hard growth slump – ANZ

Impact of the COVID-19 outbreak on India’s economic activity is emerging in hard data. Economists at ANZ BAnk expect a severe decline in Q1 FY21 growth. USD/INR is sitting at 76.2805.

Key quotes 

“Even after the lockdown is lifted, activity will only regain momentum slowly. A V-shaped recovery is unlikely.”

“India’s fiscal deficit will not be a concern for the government in these unprecedented times, in our view. We expect another round of stimulus, focused on small businesses and sector specific assistance.” 

“The Reserve Bank of India (RBI) will continue to do its bit. We expect another 50bp reduction in the policy repo rate, on or before their June meeting.”