The recession in Indian economy is now finally after contraction in two consecutive quarters as the GDP grew by 0.4 percent in the fourth quarter of October-December 2020. The GDP contracted by 7.3 in September 2020.
According to the National Statistical Office (NSO), the GDP was predicted to contract by 8 percent in the full financial. India is one of the major economies that has recorded a growth in last quarter of year 2020.
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.
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.