India’s economy will shrink this year for the first time since 1979

India’s economy won’t grow at all this year, despite an anticipated rebound in activity in the coming months, the head of the country’s central bank said Friday.

Shaktikanta Das, the governor of the Reserve Bank of India (RBI), said that GDP in Asia’s third biggest economy would fall for the fiscal year of 2020-2021, which ends next March. The last time India’s economy shrank over the course of a year was in 1979.

Das made the projection while announcing a slew of new measures to prop up the ailing economy, which has largely been shut down due to a nationwide lockdown over the coronavirus pandemic.

He announced that the RBI would slash its lending rate from 4.4% to 4%. The bank also extended a three-month debt moratorium it had offered to small and medium-sized businesses by another 90 days.

The central bank leader did not rule out the possibility of introducing other measures as the pandemic evolves.

Reliance Jio store in Kolkata, India, 12 October, 2019. Reliance Jio has come up with a new offer, wherein it is offering them with 30 minutes of free IUC (Interconnect Usage Charge) talk time according to Indian media report. (Photo by Indranil Aditya/NurPhoto via Getty Images)

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The warning of zero growth came a week after Prime Minister Narendra Modi announced that the government was committing $266 billion to support the economy, including steps to improve liquidity for businesses and an earlier $23 billion stimulus package meant to help the country’s poor.

Modi has said the measures are equivalent to about 10% of the annual output of India’s economy, though some analysts suggest that the real value is much lower.

India, once one of the world’s hottest economies, was already struggling before the outbreak. Over the last few years, growth has roughly halved.

Residents have been living under lockdown since March. The stay-at-home restrictions are expected to continue through the end of this month, although other constraints have been relaxed recently.

HUAINAN, CHINA - JUNE 12: Chinese workers prepare panels that will be part of a large floating solar farm project under construction by the Sungrow Power Supply Company on a lake caused by a collapsed and flooded coal mine on June 12, 2017 in Huainan, Anhui province, China. The floating solar field, billed as the largest in the world, is built on a part of the collapsed Panji No.1 coal mine that flooded over a decade ago due to over-mining, a common occurence in deep-well mining in China's coal heartland. When finished, the solar farm will be made up of more than 166,000 solar panels which convert sunlight to energy, and the site could potentially produce enough energy to power a city in Anhui province, regarded as one of the country's coal centers. Local officials say they are planning more projects like it, marking a significant shift in an area where long-term intensive coal mining has led to large areas of subsidence and environmental degradation. However, the energy transition has its challenges, primarily competitive pressure from the deeply-established coal industry that has at times led to delays in connecting solar projects to the state grid. Chinaas government says it will spend over US $360 billion on clean energy projects by 2020 to help shift the country away from a dependence on fossil fuels, and earlier this year, Beijing canceled plans to build more than 100 coal-fired plants in a bid to ease overcapacity and limit carbon emissions. Already, China is the leading producer of solar energy, but it also remains the planetas top emitter of greenhouse gases and accounts for about half of the worldas total coal consumption. (Photo by Kevin Frayer/Getty Images)

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Researchers at Goldman Sachs downgraded their GDP forecasts for India significantly this week, estimating that GDP would fall by 5% this fiscal year compared to a previously projected drop of 0.4%.

“The deeper trough … reflects the extremely poor economic data we have received so far for March and April,” they noted. “And the continued lockdown measures, which are among the most stringent across the world.”

The new forecast would mark a “deeper [decline] compared to all ‘recessions’ India has ever experienced,” the analysts wrote.

— Swati Gupta and Vedika Sud contributed to this report.