India’s gross domestic product or GDP contracted 7.5% in the quarter ending September compared to the same period last year, data released by the Union’s Ministry of Statistics and Program Implementation showed (Mospi) on Friday. India’s GDP fell 23.9% in the April-June quarter, the worst in decades, amid the coronavirus-induced pandemic that affected businesses and livelihoods across the country.
Analysts had said they marked a significant improvement from the massive 23.9% contraction seen in GDP figures for the quarter ending in June. The internal model of the Reserve Bank of India (RBI) expected a GDP contraction of 8.6% in the September quarter. A recent research note by Pranjul Bhandari, HSBC Securities and Capital Markets chief India economist, expected the contraction to be 7.9%. Economists in a Reuters poll had forecast that GDP would contract by 8.8%, a contraction that would still amount to a technical recession.
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The economy had grown at 3.1% in the January-March quarter, its slowest pace in at least eight years. GDP data had shown consumer spending slowing, private investment and exports contracting in the March quarter.
Data previously showed that India’s GDP growth had slowed even before the Covid-19 induced lockdown restrictions. The growth rate in the fourth quarter of fiscal 2020, 3.1%, was the weakest point in the new data series that had started in 2012-2013. Real GDP growth for fiscal year 20 is 4.2%, which is also the weakest in the series.
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India’s economy grew at its weakest pace since 2013 between April and June last year, as consumer demand and government spending slowed amid global trade frictions, increasing the chances that the The central bank will cut interest rates further at its next meeting. Asia’s third-largest economy expanded by just 5.0% year-on-year, growing by 8% in the same quarter of 2018 and by 5.8% in the previous quarter.
Global economies are experiencing a contraction due to the Covid-19 pandemic.
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