“GDP Contraction Worst Among Asian Peers”: What Analysts Say On Economic Data

GDP contracted 7.5 per cent within the July-September interval


  • GDP Contraction Worst Among Asian Peers
  • Economists Comment on GDP Contraction
  • Q2 GDP Data Shows 7.5% Contraction

The gross home product (GDP) contracted 7.5 per cent within the July-September interval in response to official knowledge at present, ensuing within the financial system to fall into an unprecedented recession. The Q2 GDP knowledge displaying a decline in numbers comes after the earlier quarter registering a close to 24 per cent contraction. Even although the most recent quarter’s knowledge confirmed slight indicators of a pick-up after the easing of coronavirus-induced restrictions, but economists and consultants have polarised views on the identical. Also Read: At -7.5%, GDP Rebounds But India Now In Technical Recession

Here are a few of the feedback from analysts on the GDP contraction within the Q2 quarter and its impact on the nationwide financial system:

Rumki Majumdar, Economist, Deloitte India:

“The contraction within the first two quarters of this fiscal yr isn’t any shock. Since the quarterly knowledge of GDP is launched with a lag of two months, we must always take a look at these numbers within the rear-view mirror conserving in perspective that latest high-frequency knowledge probably counsel a faster rebound forward. Three drivers will guarantee a sustained financial revival and rehabilitation; inclusive job progress, a sturdy providers sector rebound, and a sustained restoration in personal demand.”

Mr. Sanjay Kumar, CEO & MD, Elior India:

“The contraction within the GDP at -7.5 per cent is amongst the worst as in comparison with its Asian friends. This is certainly a reason behind concern and hopefully, with the easing of the financial coverage, we are able to anticipate some additional rebound within the coming quarter. Having mentioned that, given the truth that the financial system is formally in recession, there’s a sturdy want now for fiscal intervention as financial coverage intervention alone is not going to see us come out of this example.”

Siddhartha Sanyal, Chief Economist and Head – Research, Bandhan Bank:

”The 7.5 per cent year-on-year contraction in GDP for Q2FY21 is considerably higher than the close to 24 per cent contraction within the earlier quarter. In reality, whereas a significant enchancment in Q2’s GDP trajectory was clearly anticipated based mostly on the high-frequency indicators and company earnings, the precise quantity beat our expectation of a ten per cent year-on-year contraction. However, whereas the Q2 GDP print was a transparent optimistic shock, it is likely to be prudent to keep up warning as regards the tempo of restoration within the coming months as one can’t rule out frontloading of actions and manufacturing throughout Q2 to an extent, particularly nearer to the festive season.”


Mihir Vora, Director & Chief Investment Officer, Max Life Insurance:

”India marked a technical recession with a Q2 actual GDP contraction of -7.5 per cent and nominal GDP at -4 per cent. The quantity is marginally higher than expectations and mirrored unlocking of the financial system, enchancment in exercise ranges, and pent- up demand. The quantity additionally might look greater because the preliminary estimates have in mind knowledge for bigger corporations which have accomplished higher than the medium and small enterprises.”

Dr. Sunil Kumar Sinha, Principal Economist, India Ratings and Research:

”The financial system seems to have accomplished higher than our estimate as GDP within the q2FY21 contracted by 7.5 per cent as in comparison with India Ratings and Research’s (Ind-Ra) estimate of a contraction of 11.9 per cent. From the availability facet whereas many of the sectors have accomplished as anticipated and proceed to be in contractionary mode, the shock of the pack is manufacturing sector which confirmed a progress of 0.6 per cent in Q2FY21 GDP. Some of the high-frequency indicators equivalent to auto gross sales had been indicating of the decide up for some time.”

Suman Chowdhury, Chief Analytical Officer, Acuite Ratings & Research:

”The considerably decrease YoY contraction in Q2GDP at 7.5 per cent vis-à-vis 23.9 per cent in Q1 has been largely according to our expectations given the impact of pent up demand within the financial system after a protracted lockdown in giant components of the nation. The agriculture sector continues its good run with 3.4 per cent progress and the manufacturing sector has additionally barely stunned with a progress of 0.6 per cent.”

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