MUMBAI: State Bank of India has forecast the economy to grow a meagre 1.1% for the fiscal year as businesses are thrown into disarray due to the lockdown which has been extended till May 3. But a positive fallout could be India’s mostly fragile external balance could turn stronger with a current account surplus due to a plunge in oil prices.
“The lockdown is going to have a significant impact on our macro parameters,’’ said State Bank of India economist SK Ghosh, in a research note. “With the lockdown now being extended till May 3 and simultaneously government providing some relaxations…we estimate the overall loss for FY21 around ₹12.1 lakh crore.’’
With Covid-19 crippling economic activities across the globe leading to a collapse in crude prices, India could benefit on the current account. India always had this in deficit, where it imported more than it exported. That could change this year. “Taking oil and non-oil imports together, we can also see 25% dip in merchandise imports,’’ said Ghosh who forecasts a current account surplus of 0.7% of the gross domestic product at $19 billion this fiscal.
Source: ET
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