Q2 GDP Data: India entered into a technical recession for the first time since independence
India Q2 GDP Data Key Highlights: The country’s gross domestic product (GDP) contracted by 7.5 per cent in the July-September quarter following a successive decline of 23.9 per cent in the April-June quarter, according to the estimates released by the Ministry of Statistics and Programme Implementation on November 27. With the latest GDP figures, India has entered into a technical recession for the first time since independence in 1947. When the GDP growth rate is negative for two successive quarters, it is termed a recession. On the economic data, India’s Chief Economist Advisor (CEA) Krishnamurthy Subramanian said that a V-shaped recovery in growth could be seen across sectors with the capital and infrastructure sectors especially encouraging. (Also Read: With GDP Slump Of 7.5%, India Now Among Worst Performing Major Economies )
Due to the COVID-19 induced lockdown, the GDP contracted by 23.9 per cent in the first quarter of this financial year. The contraction was attributed to several reasons such as many sectors showing a high unemployment rate, decreased consumer demand, and loss in sales amid strict pandemic norms of social distancing.
Here are some of the key highlights from India’s Q2 GDP data:
- According to the data by the Ministry of Statistics and Programme Implementation, the agriculture sector growth was reported to be 3.4 percent, while electricity was another sector which registered a growth of 4.4 per cent in the Q2 of this financial year.
- The country’s eight core industries growth stood at -2.5 percent in the month of October, as to -0.8 pecent in September 2020.
- The growth between April-October in the eight-core sector was -13 percent as compared to 0.3 percent on a yearly basis. The industry’s growth for September was revised to -0.1 per cent against -0.8 per cent earlier on a yearly basis.
- Chief Economist Advisor Krishmurthy Subramaniam said that the V-shaped recovery is seen across sectors. “There is a V-shaped growth pattern in all major sectors today. Consumer durables, capital and infrastructure look very encouraging. Food Inflation is expected to soften in Q3,” he said.
- Consumer spending fell 11.3 per cent year-on-year in July-September quarter as compared to a revised 26.7 per cent fall in the previous quarter. Capital investments dropped by 7.3 per cent compared to a 47.1 per cent fall in Q1.
