MUMBAI – India’s economy contracted 7.5% between July and September, performing the poorest among major advanced and emerging economies, and entering a technical recession for the first time since independence, official data showed today.
Although the figures are an improvement on the record 23.9% contraction recorded in the last quarter, they indicate that Asia’s third-largest economy is in for a tough fight as it attempts to revive demand and create jobs.
The two successive quarters of contraction mean that the country has entered a “technical recession” for the first time since 1947.
After virus-led lockdowns ravaged the globe, the growth recorded by major economies, including the US, Japan and Germany, during the quarter ended September 30 raised expectations that India would also enjoy a revival.
But while consumer businesses saw a boost due to increased spending in the run-up to the October-November festive season, hopes of a broader recovery were dashed, with the construction and hospitality sectors taking a hit.
New Delhi has struggled to kick-start an economy that is expected to shrink 9.5% this year, according to estimates released by central bank governor Shaktikanta Das last month.
The International Monetary Fund has predicted that India’s economy will contract by 10.3% this year, the biggest slump for any major emerging economy and the worst since independence.
A report by Oxford Economics released earlier this month said India will be the worst-affected economy even after the pandemic eases, stating that annual output will be 12% below pre-Covid-19 levels through 2025. – AFP, November 27, 2020
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