India’s gross domestic product or GDP contracted 7.5% in the quarter ending September in comparison to the same period last year, data released by the Union ministry of statistics and programme implementation (Mospi) showed on Friday. India’s GDP fell by 23.9% in April-June period quarter, worst in decades, amid the coronavirus pandemic-induced which hit businesses and livelihoods across the country.
Analysts had said that they marked a significant improvement from the massive 23.9% contraction seen in the GDP numbers for the quarter ending June. The Reserve Bank of India’s (RBI) internal model expected a GDP contraction of 8.6% in the September quarter. A recent research note by Pranjul Bhandari, chief India economist at HSBC Securities and Capital Markets, expected the contraction to be 7.9%. Economists in a Reuters poll had forecast GDP to shrink 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. The GDP data had shown that consumer spending slowing, private investments and exports contracting in the March quarter.
Data showed earlier that India’s GDP growth had slowed even before the Covid-19-induced lockdown restrictions. The growth rate in Q4 FY20 at 3.1% was the weakest point in the new data series that had started in 2012-2013. The FY20 real GDP growth 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 period last year as consumer demand and government spending slowed amid global trade frictions, raising chances of the central bank cutting interest rates further at its next meeting. Asia’s third-largest economy expanded just 5.0% year on year, it grew 8% in the same quarter of 2018, and 5.8% in the previous quarter.
Global economies are experiencing contraction due to the Covid-19 pandemic.