July-September Quarter GDP data: What experts predict?

The GDP (Gross Domestic Product) growth numbers for the quarter ranging July-September will be published by the Statistics Department on Friday at 5:30 pm. The growth contraction in Q2 is expected to be much lower than the 23.9 percent decline that was reported in the June quarter as economic activities have resumed in most of the sectors after the lockdown in lieu of COVID-19. Economists expect the September quarter contraction to be in the range of 5-9.9 percent.

Following are the five things to note:


  1. The Reserve Bank of India mentioned in a report earlier that the Indian economy may have entered into a technical recession for the first time with two successive quarters of contraction. As per the Reserve Bank’s estimates, the economy is likely to contract by 8.6 percent in the September quarter.
  2. “It will be significantly better than in the first quarter. My estimate is that it will be a contraction of about 5% in the second quarter. In the first two months of the first quarter, production had stopped. But since the lockdown was lifted, there has been a restart,” Pronab Sen, former chief statistician of India said. He added that “even a 5% contraction was not enough and the full year (2020-21) would witness a decline of 12%.”
  3. Although GDP numbers are drooping, economists will be keeping an eye on the Q2 numbers to notice any improvement activity between the June and September quarter. According to Rahul Bajoria, chief India economist at Barclays, Q2 recovery was broad-based. He expects India’s Q2 GDP to contract by 8.5 percent.
  4. Care Ratings expects the growth to be positive in agriculture, forestry, financial services, real estate and professional services. It has stated that the contribution from allied activities is likely to be higher in the June and September Quarter. According to the rating agency, contraction in the July-September period is likely to be 9.9 percent.
  5. Aditi Nayar, principal economist at ICRA has said that a considerable recovery in manufacturing and construction is likely to support the expected improvement in the performance of the industrial GVA for the quarter. She has predicted the manufacturing GVA to contract by 10 percent in Q2.

Meanwhile, the State Bank Of India has revised its estimation for the second-quarter (Q2) GDP to -10.7% from -12.5% and cited continuous improvement in business activity index. The banks released a report on Friday which added that Q3 numbers could be even better owing to better business activity numbers,