Business & Economy

India’s GDP hit by worst quarterly slump on record, drops 23.9 percent

New Delhi, Aug 31 (efe-epa).- India’s GDP plummeted by 23.9 percent between April and June, the first quarter of its financial year, during a complete nationwide lockdown to prevent the spread of the new coronavirus. This slump marks the largest contraction of the Indian economy on record.

According to data published by the Indian ministry of statistics, the quarterly results are the worst since 1996, when the country began publishing quarterly data about its economic progress.

The period of calculation, which marks the first quarter of the financial year 2020-2021, coincided with the lockdown measures imposed on Mar. 24, which completely paralyzed all economic activity for over 1.3 billion Indians.

The latest contraction has sharply accentuated a recession trajectory for the Indian economy, which had already been in decline before the pandemic and registered growth rates of 3.1 and 5.2 percent respectively in the two preceding quarters.

According to the ministry data, almost all sectors of the economy registered steep declines except banking and food.

The worst affected sectors were air and land transport – registering a 99 percent contraction year-on-year – automobiles, manufacturing and metal industries.

Until 2016, India had witnessed more than a decade of high growth rates – touching 8 percent at times – as one of the most rapidly growing developing economies, but has seen its trajectory change in recent years with a significant slowdown. It has since been replaced by neighboring China as the fastest growing major economy.

The government by Prime Minister Narendra Modi had launched a stimulus package to revive the economy in 2019, but the lockdown measures and the pandemic’s impact erased any hopes of a recovery.

Subsequently, the government has announced a series of relief packages aimed at protecting the economy from the effects of the Covid-19 crisis.

In order to tackle the unprecedented slowdown, India began reopening its economy and lifting restrictions on key sectors in late May and has continued the process despite becoming the country with the third highest number of coronavirus cases with over 3.6 million infections reported so far.

On Monday the country registered more than 78,000 fresh infections of the disease for the second day in a row, marking the highest single-day tally of Covid-19 cases registered anywhere in the world since the pandemic began. EFE-EPA


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