Amid the fast-moving pandemic and the policy responses, economic forecasting has become an unusually uncertain enterprise. The Organisation for Economic Co-operation and Development, for example, canceled the March release of its forward-looking composite leading indicator. Forecasts in this period must be looked upon with robust skepticism. Moody’s Investors Service, one of the most respected forecasting agencies, cut its 2020 GDP-growth estimate for India to 5.3 percent on March 17 because of the expected effects of the pandemic. Ten days later, it cut the estimate to 2.5 percent. The McKinsey Global Institute has taken a different approach, developing scenarios that help conceptualize the course of the pandemic and potential paths to public-health and economic recovery (Exhibit 3). The scenarios consolidate assumptions into a range of estimates of the GDP impact of lockdowns on consumption and economic activity.
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