Home Headline News India is Back to Growth

India’s economy grew 0.4 percent year-on-year in the final quarter of 2020, official data showed Friday, ending its first recession since independence as easing coronavirus restrictions sparked a modest recovery.

The country has struggled to claw back lost ground after a stringent, months-long lockdown caused the labour market to collapse and the economy to contract by nearly a quarter between April and June.

India entered a “technical recession” last year for the first time since gaining independence in 1947 after registering two successive quarters of contraction. The government now estimates annual GDP will fall eight percent in 2020-21.

The latest figures, which fell shy of the expectations of a Bloomberg survey of economists pegging growth at 0.5 percent, will nonetheless bring some cheer to Prime Minister Narendra Modi’s beleaguered government.

Key sectors such as construction and manufacturing showed an improvement compared to the same quarter last year, Friday’s data revealed.

And in January car sales in the bellwether automobile sector increased by more than 11 percent compared to a year earlier, according to industry figures.

Restrictions have been relaxed as coronavirus infections have slowed in the country of 1.3 billion in recent weeks, allowing economic activity to resume.

But the government still faces the tough task of creating enough jobs for India’s overwhelmingly young population, as millions of migrant workers make their way back to cities, reversing a massive exodus sparked by the lockdown.

– ‘Not out of the woods’ –

“We can’t say we are completely out of the woods,” Mumbai-based economist Ashutosh Datar told AFP.

“The real test would be what happens next financial year. Today’s number is not a major surprise,” he said.

The government has forecast economic growth of 11 percent in the 2021-22 financial year, in line with the International Monetary Fund’s prediction of 11.5 percent.

But experts have warned that India, whose tally of 11.1 million infections is second only to the United States, could experience another wave and be hit by new variants of the virus, as has happened in Brazil, Britain and South Africa.

India’s economy was in the throes of a prolonged slowdown even before the pandemic, and the hit to global activity from the virus and one of the world’s strictest lockdowns combined to deal the country a severe blow.

“The real question is if a second Covid wave happens, what will be the reaction? If it is a national lockdown like we had last March, then the effects will be just as negative,” Pronab Sen, India’s former chief statistician, told AFP.

Authorities have so far imposed limited restrictions, attempting to strike a balance between keeping the economy going and targeting outbreaks in the hardest-hit regions of the country.

The financial and film capital of Mumbai ordered fresh pandemic curbs on Monday, banning religious gatherings and political rallies after infections spiked to levels last seen in October.

New Delhi is hoping that the economy will get a further boost from a massive vaccination drive that kicked off last month but which is already running behind schedule, with 12.2 million shots administered so far to health workers and other frontline staff.

You may also like

logo-white

Your Trusted Source for Capital Markets & Related News

© 2024 LiveTradingNews.com – For The Traders, By The Traders – All Right Reserved.

The information contained on this website shall not be construed as (i) an offer to purchase or sell, or the solicitation of an offer to purchase or sell, any securities or services, (ii) investment, legal, business or tax advice or an offer to provide such advice, or (iii) a basis for making any investment decision. An offering may only be made upon a qualified investor’s receipt not via this website of formal materials from the Knightsbridge an offering memorandum and subscription documentation (“offering materials”). In the case of any inconsistency between the information on this website and any such offering materials, the offering materials shall control. Securities shall not be offered or sold in any jurisdiction in which such offer or sale would be unlawful unless the requirements of the applicable laws of such jurisdiction have been satisfied. Any decision to invest in securities must be based solely upon the information set forth in the applicable offering materials, which should be read carefully by qualified investors prior to investing. An investment with Knightsbridge is not suitable or desirable for all investors; investors may lose all or a portion of the capital invested. Investors may be required to bear the financial risks of an investment for an indefinite period of time. Qualified investors are urged to consult with their own legal, financial and tax advisors before making any investment. Knightsbridge is a private investment firm that offers investment services to Qualified Investors, Members and Institutions ONLY. Qualified Investors are defined as individuals who have met those Qualifications in the relevant jurisdictions. Members are defined as individuals who have been accepted into the Knightsbridge membership program. Institutions are defined as entities such as banks, pension funds, and hedge funds. If you are not a Qualified Investor, Member or Institution, you are not eligible to invest with Knightsbridge. All investments involve risk, and there is no guarantee of profit. You may lose some or all of your investment. Past performance is not indicative of future results. Knightsbridge is not a registered investment advisor, and this disclaimer should not be construed as investment advice. Please consult with a qualified financial advisor before making any investment decisions. By accessing this website, you agree to the terms of this disclaimer. Thank you for your interest in Knightsbridge.