GDP: 7.5% contraction in the second quarter

GDP in second quarter showed contraction of 7.5 per cent with a large improvement form 23.9 per cent contraction of previous quarter. During Q2, GDP in constant prices (2011-12) estimated at ₹ 33.14 lakh crore, as against ₹ 35.84 lakh crore in Q2 of 2019-20 and marked against 4.4. per cent growth of last year. Estimate for Gross National Product for second quarter was released by National Statistic Office (NSO) and Ministry of Statistics and Programme Implementation.

In comparison with last quarter there are significant improvement in sectors such as manufacturing, construction and mining & Quarrying. However, performance in terms of GDP in agriculture sectors remains the same with Q1. Financial, Real estate and professional services also failed to gain much momentum in second quarter.

RBI Governor, Shaktikanta Das cautioned to monitor the sustainability of maintaining the demand exhibited in the festival season and warned of a downside risk to growth due to recent surge in infections in advanced economies and parts of India. Chief economic officer evaluated the number of GDP contraction as quite encouraging in comparison with last quarters digits and given pandemic situation.

Reuters poll forecast predicted an escape from recession early next year based on the progress of covid-10 vaccine. Coupling the hope of soon delivery of vaccines along with festive season demand has created optimism in Indian economy and resulted hopes of pick up can be observed in Indian stocks, poll team analyzed.