Recession hits India: GDP contracts 7.5% in Q2
New Delhi, Nov 27: India's GDP (gross domestic product) contracted by 7.5% in the July-September quarter, showed data released by the National Statistical Office (NSO).
This officially marks India's entry into economic recession. In economics, two consecutive quarters of contraction in GDP growth is technically considered a recession.
The gross domestic product (GDP) had expanded by 4.4 per cent in the corresponding July-September period of 2019-20, according to data released by the National Statistical Office (NSO).
The economy had shrunk by an unprecedented 23.9 per cent in the first quarter of this fiscal due to the coronavirus pandemic and resultant lockdowns.
China''s economy grew by 4.9 per cent in July-September this year, faster than the 3.2 per cent growth in April-June 2020.
Economists polled by Reuters estimated the Indian economy to shrink by 8.8% in the September-ended quarter. They also expect GDP to fall in the October-December quarter, followed by a 0.5% expansion between January and March, with the economy shrinking 8.7% over the whole financial year 2020-21, the country's worst performance in at least four decades.
Despite some signs of improvement in growth seen in October's macro data like IIP and PMI, RBI governor Shaktikanta Das said on Thursday, ahead of the GDP data that a recent surge in infections presents downside risks for the economy.
"We need to be watchful about the sustainability of demand after the festivals and a possible reassessment of market expectations surrounding the vaccine," he said.