Business & Economy

India comes out of recession with 0.4 percent growth in 3rd quarter

New Delhi, Feb 26 (efe-epa).- India’s gross domestic product or GDP grew by 0.4 percent between October and December, which makes up the third quarter of the country’s fiscal year beginning in April, the government announced Friday.

The growth figure marked the South Asian country coming out of recession that saw its GDP fall for two consecutive quarters – -7.3 percent in July-September and -23.9 percent in April-June -, coinciding with the strict lockdown imposed across India to check the spread of the novel coronavirus.

According a quarterly data published by the Ministry of Statistics, the GDP of the country for the third quarter of the financial year 2020-21 recorded a growth of 0.4 percent year-on-year.

The sectors that contributed towards growth were agriculture (3.9 percent), manufacturing (1.6 percent), construction (6.2 percent), and electricity, gas and water supply (7.3 percent).

Sectors that performed poorly during this period were trade and hospitality, which recorded a fall of 7.7 percent.

However, the government predicted negative growth in GDP, “estimated at -8.0 percent” for the fiscal year 2020-21, which concludes on Mar. 31, as compared to 4.0 percent in 2019-20.

It also underlined that the per capita income in real terms in the current fiscal year is expected to fall by 9.1 percent, as against 2.5 percent in the previous year.

“The measures taken by the Government to contain spread of the Covid-19 pandemic have had an impact on the economic activities,” underlined the ministry statement.

The Reserve Bank of India, which is the central bank, has already forecast a 7.5 percent fall in GDP for 2020-21, but expects a sharp economic rebound of 10.5 percent in the next fiscal year.

These forecasts are very similar to the estimations of the Ministry of Finance in its annual survey in January, in which it predicted a “V” shaped recovery, signifying rapid economic growth after the sharp decline.

The ministry predicted an 11 percent growth in the next fiscal year following a decline of 7.7 percent in the country’s GDP in the current year.

The International Monetary Fund also expects the Indian economy to make a strong comeback in the fiscal year 2021-22, a growth of 11.5 percent, above China’s by 8.1 percent.

Despite strong signs of recovery, the government report also warned that it would take at least two years for India to return to growth levels prevalent before the pandemic struck last year. EFE-EPA

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