India’s economy likely accelerated in Jan-Mar

1 June, 2021 12:00 AM printer

NEW DELHI: India’s economic growth likely picked up in the January-March quarter from the previous three months, but economists have grown more pessimistic about this quarter after a harsh second wave of COVID-19 hit the country last month.

The median forecast from a Reuters survey of 29 economists showed gross domestic product in Asia’s third-largest economy grew 1.0% in the March quarter from a year earlier, up from 0.4% in the previous quarter when India began pulling out of a steep pandemic-induced recession in earlier six months, report agencies.

But the second wave of infections and deaths across the world’s second-hardest hit country has caused forecasters to trim their projections for the coming months.

The median forecast for April-June growth is 21.6%, down from a month-earlier estimate of 23% after the resurgence prompted most industrial states to impose lockdowns, throwing millions out of work. For the fiscal year to March 2022, economists cut their median forecast to 9.8% from 10.4%.

The statistics ministry is to announce the data at 1200 GMT.

India has recorded 27.9 million COVID-19 infections, behind only the United States, and 325,972 deaths as of Sunday, although the rise has begun to slow.

Prime Minister Narendra Modi’s administration says the economic impact will not be as severe as last year, as lockdowns are looser this time and growth in manufacturing and exports is higher.

But Arun Singh, global chief economist at Dun & Bradstreet, said the downside risks to growth were intensifying as the second wave makes the return to pre-pandemic growth rates difficult.

“Owing to the intensifying nature of the pandemic and the spread to the rural areas, which were largely spared in 2020, we expect growth prospects to have deteriorated for 2021/22.”

The central bank, which has kept monetary policy loose while boosting liquidity to the economy, said on Thursday that growth prospects will depend on how fast India can arrest infections.