India’s GDP grew 1.6 percent in the fourth quarter of FY21 (Q4FY21) after growing 0.4 percent in the December quarter. The full-year GDP for fiscal year 21 was also revised from -8 percent to -7.3 percent.
India’s GDP growth improved to 1.6 percent in March. (Photo: Reuters)
India’s gross domestic product (GDP) grew 1.6 percent in the fourth quarter of 2021, marking two-quarters of the growth in a row after emerging from a rare recession. The GDP data published by the National Bureau of Statistics (NSO) for the fourth quarter of fiscal year 21 is consistent with estimates previously published by several rating agencies.
In the corresponding period 2019-20, GDP growth was 4 percent. The improvement in GDP in the March quarter suggests that the country’s economy recovered rapidly from negative growth in the first two quarters of FY21.
It should be noted that the Indian economy rebounded quickly from the third quarter of fiscal year 21 (December quarter) as restrictions were eased. the festive sales too contributed to the growth of 0.4 percent in the third quarter of fiscal year 21 according to the contract 23.9 percent in the first quarter and 7.5 percent in the second quarter.
The economy continued to improve in the January-March quarter, with key indicators such as GST collections, employment and demand rebounding.
The government has also released preliminary full year 21 GDP data for the full year. Full-year GDP growth has been revised to -7.3 percent, an improvement over the previously expected 8 percent decline.
However, many economists say the March quarter GDP numbers will have little impact on current economic growth as the second wave once again disrupted the recovery momentum.
SECOND WAVE HURDLE
While rating agencies had previously forecast that India’s economy would see double-digit growth in FY22, the second wave of the pandemic and subsequent local lockdowns led to it Downward revisions to growth estimates.
Most economists expect the worst effects of the second wave to be felt in the first quarter of fiscal 22.
It’s worth noting that Moody’s cut its original FY22 growth forecast for India to 9.3 percent, while Barclays cut its growth estimate for the country to 9.2 percent.
While India has the option to register double-digit growth on a lower basis in fiscal year 22Experts believe this will depend on key factors such as reviving demand and reopening key economic activities.
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