Covid impact: Icra pegs GDP growth at 1.9% in Q4 and 4.3% in FY20

Earlier, the second advance estimates of the government pegged the growth at 5 per cent in 2019-20, but analysts had doubted that number

Icra has projected the eocnomy to grow by 1.9 per cent in the fourth quarter against 5.8 a year ago and and 4.3 per cent in 2019-20 against 6.1 per cent in 2018-19.

Earlier, the second advance estimates of the government pegged the growth at 5 per cent in 2019-20, but analysts had doubted that number.

The second estimates came in on February 28. After that, there was a lockdown of roughly ten days in March.

“The sudden pause in economic activity in many sectors after the commencement of the lockdown and its associated impact on profitability, are expected to have dampened GDP growth to 1.9 per cccent in Q4 FY20, despite the healthy trends in the rabi season," Icra principal economist Aditi Nayar said.

The impact of the Covid-19 outbreak on travel, tourism and hospitality, government expenditure compression amid revenue shortfalls in March 2020, and subdued credit growth are expected to have adversely impacted service sector performance in Q4 of 2019-20, Nayar said.