New Delhi: India’s growth forecast has been downgraded by over 400 basis points, and revised to 1.6 per cent by investment banking company Goldman Sachs. Also Read - 'Slowdown Bottomed Out', Says Centre as GDP Growth Improves Marginally to 4.7% in Q3

As per the report, “25 per cent of activity in India will be wiped out due to the lockdown.” It must be noted that a countrywide 21-day lockdown is in effect in India to contain the spread of coronavirus. Also Read - GDP Growth Improves Marginally to 4.7 Per Cent in December Quarter

“Three-week lockdown would be a 220 bps reduction in growth. Additional 150 bps reduction in India growth will be due to reduction in global growth. Estimated India’s GDP growth will be at 1.6%,” News18 quoted from the report. Also Read - Moody's Lowers India's GDP Growth Rate For 2020 to 5.4%

Further, the banking company has also predicted that Central Bank RBI will reduce the interest rates by 50 bps. “India’s fiscal response has to be temporary, targetted and carefully calibrated,” the report said.

Moreover, the economists who have prepared the report are also expecting a strong sequential recovery in the second half of the fiscal year, in the hope that lockdown will be lifted in a staggered manner.