India Economy Expands 8.4% In September Qtr
November 30 2021 - 6:22AM
RTTF2
India's economic growth remained robust in the September
quarter, preliminary data from the government showed Tuesday, after
the pace of expansion hit a record in the previous three months
boosted by a low base-effect due to the coronavirus pandemic last
year.
Gross domestic product grew 8.4 percent year-on-year in the
three months to September, the statistics ministry said. That was
in line with economists' expectations.
In the same quarter of 2020, the economy had contracted 7.4
percent as the coronavirus ravaged economic activity across the
country. In the April to June quarter this year, the economy grew a
record 20.1 percent versus a 24.4 percent contraction in the same
period last year when the government imposed one of the most severe
lockdowns to curb the spread of the Covid-19 pandemic. The gross
value added increased 8.5 percent year-on-year in the September
quarter. The latest surge in growth is in tandem with the pick up
in economic activity as public confidence was boosted by relaxation
of restrictions, thanks to a sharp fall in new infections and
increased vaccination. Citing its own calculations, Capital
Economics said the Indian economy grew by around 12 percent from
the previous quarter, underpinned by a strong rebound in household
consumption and investment.
The firm estimated that GDP recovered all its losses from the
second wave and was a touch above its pre-virus level last
quarter.
However, the recovery has entered a slower phase as recent data
suggest that the reopening boost faded, Capital Economics said.
Supply bottlenecks including the global semiconductor shortage that
has weighed on vehicle production, and coal shortages are likely to
have taken a toll on industry this quarter, Capital Economics
economist Shilan Shah said. Shah said the downside risks are rising
and, with vaccination coverage still very low, there remains a risk
of renewed virus outbreaks. "The new Omicron strain of the virus
detected in southern Africa could end up being the factor that
crystallizes these concerns if it reaches India," the economist
said. "Given the downside risks, it seems highly likely to us that
the RBI will keep policy accommodative for a while longer yet."
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