Covid lockdown likely to hit economic activities in Apr-Jun: Report

New Delhi: With increasing covid-19 cases, in the second wave, the restrictions and partial lockdowns imposed in several states and cities are likely to impact economic activities in the current quarter (April-June), according to a Goldman Sachs report.

It is reported that specific services such as food and beverages, leisure and recreation, and transport are likely to be more badly impacted while other sectors such as construction and manufacturing will face comparatively limited impact.

"While these restrictions are likely to hit activity in Q2, we think the activity is likely to rebound sharply from Q3 onwards as containment policies normalise," it said.

"Consequently, our economists have revised down their overall CY21 real GDP growth forecast to 10.5 per cent (from 10.9 per cent previously) but remain above the consensus forecast of 9.4 per cent." said the report.

However, the report expressed confidence that the domestic fiscal policy and government spending will continue supporting growth in the coming months.

Globally, Goldman Sachs' economists remain optimistic about a rebound in the global economy and expect very strong GDP growth in 2021. A strong recovery in global growth provides a supportive backdrop for India's macro and cyclical recovery too, it said.