The economy of India has shrunk for the second consecutive quarter, pushing the country into an unprecedented ‘recession’.
According to Central Bank Deputy Governor (monetary policy), Michael Patra and a team of economists, the Gross Domestic Product (GDP) contracted 8.6 percent in the September quarter-end. The economy of the country has collapsed about 24 percent from April to June.
As per Reserve Bank of India’s first-ever published ‘Nowcast’ India has entered a technical recession in the first half of 2020-21 for the first time in history. A median forecast by economists in a Bloomberg survey shows a contraction of 10.4 percent in the July-September quarter.
Reserve Bank’s number is rallied up the cost cuts at companies boosting operating profits even when sales dipped. The team of authors used a range of indicators from vehicle sales to flush banking liquidity to signal beaming prospects for October. They stated that if this upturn is sustained, the Indian economy will grow in the October-December quarter.
However, according to the team of economists, there is a grave risk of generalization of price pressures, inflation expectations feeding into loss of credibility in policy interventions. They have also highlighted the risks to global growth from the second wave of the COVID-19 pandemic.