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‘GDP Contraction Amongst The Worst As Compared To Asian Peers’: Say Analysts On Q2 Data

The gross home product (GDP) contracted 7.5 per cent within the July-September interval in accordance with official information at present, ensuing within the financial system to fall into an unprecedented recession. The Q2 GDP information exhibiting a decline in numbers comes after the earlier quarter registering a close to 24 per cent contraction. Even although the most recent quarter’s information confirmed slight indicators of a pick-up after the easing of coronavirus-induced restrictions, but economists and consultants have polarised views on the identical.

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 12 months isn’t any shock. Since the quarterly information of GDP is launched with a lag of two months, we must always take a look at these numbers within the rear-view mirror retaining in perspective that latest high-frequency information presumably counsel a faster rebound forward. Three drivers will guarantee a sustained financial revival and rehabilitation; inclusive job development, a strong companies 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 for concern and hopefully, with the easing of the financial coverage, we are able to count on some additional rebound within the coming quarter. Having stated that, given the truth that the financial system is formally in recession, there’s a robust want now for fiscal intervention as financial coverage intervention alone won’t 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 truth, whereas a serious 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 10 per cent year-on-year contraction. However, whereas the Q2 GDP print was a transparent optimistic shock, it is perhaps prudent to take care of warning as regards the tempo of restoration within the coming months as one can not 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 -Four 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 consider information for bigger firms which have accomplished higher than the medium and small enterprises. We count on Q3 GDP at -1.5 to -2 per cent whereas This fall development could also be marginally optimistic if there are not any additional COVID-induced lockdowns.”

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 2QFY21 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 a lot 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 development of 0.6 per cent in 2QFY21 GDP. Some of the high-frequency indicators corresponding 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 consistent with 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.Four per cent development and the manufacturing sector has additionally barely shocked with a development of 0.6 per cent.”


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