NEW DELHI: Growth recovery which started in the third quarter of 2020-21 is likely to be maintained in the January-March quarter while full-year contraction is estimated to be marginally narrower than the previous estimate of a decline of 8%.
The National Statistical Office (NSO) will release the January-March quarter and the full-year GDP data for 2020-21 later today.
The strict lockdown imposed to prevent the spread of the deadly virus last year had hurt the economy sharply and led to a record contraction of 24.4% in the April-June quarter of 2020-21 and led to a technical recession of two consecutive quarters of contraction.
But the resumption of economic activity had led to a sharp recovery and growth returned in the October-December quarter, although marginally. GDP grew 0.4% in the three months to December 2020-21.
“It is likely that the previously published NSO GDP growth for FY21 at –8% might see an upward revision once the numbers are released on 31 May’21. Based on quarterly GDP numbers in FY21 and full year FY21 GDP estimates, Q4GDP was projected to reveal a contraction of 1.1% .
Based on SBI Nowcasting model the forecasted GDP growth for Q4 would be around 1.3% (with downward bias). We now expect GDP decline for the full year to be around -7.3% (our earlier prediction: -7.4%),” Soumya Kanti Ghosh, group chief economic adviser at State Bank of India recently said in a note.
The second wave has led to localised lockdowns which economists say are starting to hurt overall growth. The Reserve Bank of India (RBI) has retained its growth estimate of 10.5% for 2021-22 and expects the impact of the surge to be confined largely to the first quarter of the current fiscal year with a possible spillover to July. Most experts see growth to be largely intact for now.