The outlook for the Indian economy looks bleak as the Goldman Sachs has revised its forecast for the country’s real GDP growth rate for the financial year 2020-21 to 1.6 per cent.

In a report, it said that with the spread of the pandemic and the eventual lockdown have resulted in a significant contraction in economic activity. The outlook has been revised downwards from the previous forecast of 3.3 per cent. “The 1.6 per cent growth for FY21 would be deeper compared to widely perceived ‘recessions’ India experienced in the 1970s, 1980s, and in 2009. Notably, the global COVID-19 crisis—or more precisely, the response to that crisis—represents a physical (as opposed to purely financial) constraint on economic activity that is unprecedented in postwar history,” it said.

It said that despite the policy support provided so far the nation-wide shutdown, and rising public anxiety about the virus are likely to lead to a sharp deterioration in economic activity in March, and in the next quarter.