The Indian economy has exited recession after two consecutive quarters of de-growth as the gross domestic product (GDP) growth expanded by 0.4 per cent in the three months ended December 2020 as against a contraction of 7.3 per cent in the September quarter. India is among the few major economies to post growth in the last quarter of 2020. For the full year, GDP is estimated to contract by 8 per cent in the financial year, the National Statistical Office (NSO) said in a press release.
Key Things To Know About India’s Return To Growth In The December Quarter
India’s quarterly GDP growth had slid by record margins for two consecutive quarters due to the Covid-19 virus outbreak.
The GDP had contracted by a massive 23.9 per cent in the June quarter amid the pandemic-led nationwide lockdown and by 7.5 per cent during the September quarter.
In fact, India slipped into a technical recession in the July-September period as the domestic product (GDP) fell for two successive quarters.
The median forecast from a survey of 58 economists by Reuters this week had predicted the gross domestic product to grow 0.5 per cent year-on-year in the December quarter.
Meanwhile, the output of eight core infrastructure sectors grew 0.1 per cent in January 2021, compared to last year, according to government data on Friday, February 26.
The infrastructure output, which comprises eight core sectors including coal, crude oil, and electricity, declined by 8.8 per cent during April-January 2020-2021 against a growth rate of 0.8 per cent in the same period of the previous year.
In its Monetary Policy Review presented on February 5, the Reserve Bank of India has projected a GDP growth of 10.5 per cent in financial year 2021-22. The International Monetary Fund expects India to grow at 11.5 per cent in the same period.
Economists have raised their forecasts for the current and next fiscal year, expecting a pick-up in government spending, consumer demand and resumption of most economic activities.
Moody’s revised its forecast to a 7 per cent contraction for the current fiscal year, ending in March, from an earlier estimate of a 10 per cent contraction. It predicted 13.7 per cent growth for next fiscal year, helped by resumption of economic activities.
And India Ratings and Research (Ind-Ra) has suggested that the gross domestic product (GDP) growth will bounce back to 10.4 per cent year on year (y-o-y) in the next fiscal year, primarily driven by the base effect.