As India continued its nationwide lockdown till May 3 to combat the COVID-19 virus, British brokerage firm Barclays said that the extension will inflict an economic loss of $234.4 billion, and result in zero economic growth for the year 2020 from its previous projection of 2.5 per cent.

The firm has also cut the projected FY21 growth from 3.5 per cent earlier to 0.8 per cent.

Barclays’ statement comes hours after the Prime Minister Narendra Modi extended the three-week lockdown ending Tuesday till May 3 (Sunday), citing the need to arrest the growth in coronavirus infections. He did hint at relaxations in unaffected areas starting from April 20 but added that this will be based on strict monitoring.

The firm had said earlier that the three-week lockdown would likely to have an economic cost of $120 billion which is now estimated to balloon up to $234.4 billion.

“While India’s COVID outbreak has not officially reached the community transmission stage, we believe the existing restrictions on movement are causing much more economic damage than anticipated. Despite being characterised as essential sectors, the negative impact of the shutdown measures on the mining, agriculture, manufacturing and utility sectors appears higher than we had expected,” it said in a report.

In particular, the negative impact on the essential sectors of mining, agriculture, manufacturing and utility sectors appears higher than expected, it said.

The brokerage said while arriving at the numbers, it has assumed that the lockdowns end by early June, followed by a modest rebound in activity, reflecting inventory rebuilding across certain sectors.

If the COVID-19 outbreaks in a localized area continue leading to frequent shutdowns, the scope for the economy to recover will continue to decline, it warned.