According to a team of economists, including veteran economist and RBI Deputy Governor Michael Patra, India’s economy can remain in the negative zone for the second time in a row and now we are moving towards unprecedented recession.
According to the latest ‘Nowcast’ by the Reserve Bank of India (RBI), india’s GDP in the second quarter can be around 8.6% negative. Meaning once again, a big contract will be seen in the economy. This Reserve Bank estimate is based on high frequency data. Let us know that in the last quarter, there was a decline of about 24% in GDP.
Negative growth in two consecutive quarters means ‘recession’
Technically, if any economy stays in the negative zone for two consecutive quarters, then it is assumed that the economy has come into recession. After the big negative growth in the first quarter, if the growth remains in the negative in the second quarter, then officially we will be in a historical recession.
According to the RBI report, now technically, India’s economy has entered into recession. Government figures related to GDP are coming 27th, then the situation will be more clear.
Growth can be positive in the third quarter
According to Bloomberg’s report, it has come out in the Reserve Bank’s report that even though the companies have fallen sales after the Corona crisis, due to cost cutting, the operating profit of the companies has improved. In the report, estimates have been made on the basis of vehicle sales to banking liquidity. According to the report, if the economy continues to improve, then by the third quarter, the Indian economy may return to growth territory again.
GDP growth in the first quarter was -23.9%
The GDP growth for the first quarter of the financial year 2021 ie from April to June was -23.9%. This was the first time in the history of 40 years of measuring GDP that the GDP figures came in negative. At the same time, the January-March quarter means 3.1% in the previous quarter.