AUGUST 31, 2020
GDP Plunges by Record 23.9% in Q1 as India Enters Recession, Contraction Worst Among G20 Nations
India has officially entered a phase of recession, with GDP data released on Monday showing a collapse of 23.9 per cent of gross domestic product in the second quarter, as the Indian economy was weighed down by the coronavirus pandemic and the severest of lockdowns that led to halt in business activities and a sharp fall in consumer demand.
The National Statistical Office (NSO) said GDP contraction in the April-June period of FY21 was the largest slump on record since India started reporting quarterly data in 1996. The fall in output compares to 3.1 per cent growth in the previous quarter, which was the worst performance in at least eight years.
The contraction is also the worst among G20 nations. Before this, the UK had reported the biggest slump in GDP among the world’s top 20 economies with a 21.7% plunge in the June quarter, its deepest contraction on record.
India has reported over 36 lakh cases of the novel coronavirus and over 64,000 deaths – third behind only the United States and Brazil. Continuing restrictions on transport, educational institutions and restaurants – and weekly lockdowns in some states – have hit manufacturing, services and retail sales, while keeping millions of workers out of jobs.
India’s nationwide lockdown was imposed on March 25 and continued till the end of May, after which restrictions were gradually lifted from June. While April and May are considered washouts for most businesses, pent-up demand boosted consumption somewhat in June, though well below pre-Covid levels.
Economists polled by Reuters predicted a contraction of 8.1 per cent and 1.0 per cent in the September and December quarters respectively, which would dash any hopes of an economic recovery this year.
Courtesy/Source: News18 / PTI
