India has entered a technical recession, as the country's GDP has contracted 7.5 percent in the second quarter of the 2020-2021 financial year, following a 23.9 decline recorded in the first quarter, the Indian Statistics Ministry said in a press release on Friday
NEW DELHI (Pakistan Point News / Sputnik - 28th November, 2020) India has entered a technical recession, as the country's GDP has contracted 7.5 percent in the second quarter of the 2020-2021 financial year, following a 23.9 decline recorded in the first quarter, the Indian Statistics Ministry said in a press release on Friday.
On November 11, the Indian Reserve Bank already warned that India was likely to enter a technical recession for the first time in its history with two successive quarters of GDP contraction.
"GDP at Constant (2011-12) Prices in Q2 of 2020-21 is estimated at �� 33.14 lakh crore [Indian rupees, $449.6 billion], as against �� 35.84 lakh crore in Q2 of 2019-20, showing a contraction of 7.5 percent as compared to 4.4 percent growth in Q2 2019-20," the press release said.
According to the ministry's data, the growth was recorded in the agricultural sector (3.4 percent), electricity, gas and water supply sector (4.4 percent) and manufacturing (0.6 percent). However, the COVID-19 lockdown greatly affected the sectors of trade, hotels, transport and services, which declined 15.6 percent.
According to the governor of the Indian Reserve Bank, Shri Shaktikanta Das, this data suggested that the Indian economy has the capacity to recover from the loss caused by the pandemic, which led to a 23.9 percent recession of the national GDP in the first quarter of the 2020-2021 financial year.
"After witnessing a sharp contraction in GDP by 23.9% in Q1:2020-21 and a multi-speed normalisation of activity in Q2, the Indian economy has exhibited stronger than expected pick up in momentum of recovery. The global economy has also witnessed a stronger than expected rebound in activity in Q3. The IMF has accordingly revised its assessment for global growth in 2020 to a less severe contraction than what was assessed in June 2020," Das said on Thursday.
India's economic growth slowed even before the outbreak of the pandemic, with the lowest GDP growth of 4.1 percent since the global 2008 financial crisis being recorded in the third quarter of the 2019-2020 fiscal year. In the first quarter of the 2020-2021 financial year, India's GDP has contracted by a record 23.9 percent, marking the largest drop since 1966, when the nation began publishing quarterly data, and the worst among major Asian economies.