New Delhi: India’s gross domestic product (GDP) showed an impressive growth as it shot up to record a 20.1 per cent rise in the April-June period or the first quarter of 2021-22. The growth is a remarkable recovery from the negative growth which was witnessed during the corresponding period of last fiscal when it was a dismal -24.4 per cent, mainly due to Coronavirus induced lockdowns.
The remarkable improvement in the June quarter GDP rate, despite the onslaught of the fierce second wave of the pandemic suggests that the country’s economy recovered rapidly after registering negative growth for the first two quarters of 2020-21. This is the third consecutive quarter when positive growth has been witnessed, as GDP had grown by 0.5 per cent third quarter of 2020-21 and 1.6 per cent in the fourth quarter of 2020-21.
However the double digit growth in GDP is in sync with predictions of several polls as well as that of the Reserve Bank of India (RBI).
The central bank had predicted that the GDP in the first quarter of 2021-22 is likely to grow at 18.5 per cent from earlier projected growth rate of 26.2 per cent.
In the first two quarters of 2020-21, the growth was -24.4 per cent and -7.4 per cent respectively, as the country was under complete lockdown due to the outbreak of the Coronavirus pandemic and all economic activities had come to a halt.
Gradually after restrictions were lifted and festival season related activities started from October 2020 onwards, the third and fourth quarters showed meagre but positive growth. AGENCIES
Economic toll from second Covid-19 wave not as bad as feared
New Delhi: The economic toll from a deadly second wave of Covid-19 that swept through India last quarter doesn’t appear to be as bad as feared, with analysts still seeing the nation pulling off the world’s fastest growth this year.
A better-than-expected manufacturing performance and a milder hit to services, combined with a robust pace of vaccinations, have helped keep the annual growth outlook for the economy steady at 9.2%, according to a Bloomberg survey. That pace is the same seen in a poll last month and the quickest among major economies.
“The economic damage appears to be less than previously expected,” said Rahul Bajoria, chief India economist at Barclays Bank Plc. “With the second outbreak brought under control, a rapid recovery appears underway,” he said.
Data due later Tuesday will likely show gross domestic product grew 21% in the three months through June from a year ago, according to the median of 45 estimates compiled by Bloomberg, mainly as a bounce back from last year’s crash.
The big pop, however, will likely obscure a slowing from the previous quarter, caused by activity curbs to stem the second wave of the virus. While the government doesn’t report an official quarter-on-quarter figure, Bloomberg Economics estimates the economy slumped sequentially, contracting 12% from the January-March period.
In recent months, India’s annual growth forecast has gone from being upgraded to double digits to slashed by the steepest rate amid uncertainty about Covid’s devastation on the economy. But recent data from high-frequency indicators have shown the impact of pandemic restrictions were less severe than last year, with demand staying resilient.
Factory managers in India saw a surge in activity in July, reflecting a pick up in new orders, while a similar survey of services’ purchasing managers showed the sector was inching back toward expansion. Exports, which account for nearly a fifth of the economy, have been growing for the past eight months signaling strong global demand.
