The data confirms that India has entered a technical recession, after two consecutive quarters of contraction in GDP.
As the economy rebounded from a record slump of 23.9 per cent in the previous quarter due to slowdown caused by the coronavirus pandemic, India’s gross domestic product (GDP) contracted 7.5 per cent in the July-September period. The data confirms that India has entered a technical recession, after two consecutive quarters of contraction in GDP. It’s for the first time that the country has seen negative growth in two consecutive quarters since 1996 when the country began quarterly records.
The Indian economy is on track to register an overall contraction of 8.7 per cent over the full year, which will be its worst performance in more than four decades.
The latest data, in the aftermath of COVID-19-related restrictions, brings hopes of recovery following thousands of job losses, and the majority of workforce staying indoors.
As the pickup sustains, many economists expect the economy to return to expansion mode as early as in the December quarter. Experts predict a contraction of 3 per cent in the December quarter, followed by an expansion of 0.5 per cent in the final January-March period of the financial year 2020-21.
The government had recently announced additional stimulus measures under its Atmanirbhar Bharat series of announcements in a bid to boost the economy.
Finance Minister Nirmala Sitharaman, under Atmanirbhar Bharat 3.0, listed measures worth ₹ 2.65 lakh crore with a focus on job creation and sectors such as real estate, taking the total monetary and fiscal aid in the country’s battle against COVID-19 to ₹ 29.88 lakh crore or 15 per cent of its GDP.
RBI Governor Shaktikanta Das, on Friday, had highlighted a stronger-than-expected recovery from the coronavirus-led lockdown, hinting at continued monetary policy support to revive the economy.
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