India is likely to face recession for the first time in history in the first half of fiscal, according to Reserve Bank of India.
A team of economists, including Michael Patra, the RBI’s Deputy Governor in charge of monetary policy, said that the economy shrank for the second straight quarter.
During August, the government reported a 23.9 percent contraction in its Gross Domestic Product (GDP) for the April-June quarter. The central bank has ‘nowcast’ that Gross Domestic Product (GDP) for the July-September quarter is set for a contraction of 8.6 percent.
The RBI in its ‘State of the Economy’ report stated that “India has entered a technical recession in the first half of 2020-21 for the first time in its history.” It stated that the government will publish the official statistics on 27 November.
However, as per RBI report, the estimates of the National Statistical Office (NSO) that are expected at the end of November 2020 will formally bear out the extent of improvement that occurred in the quarter.
Earlier in October, the IMF projected that the economy is likely to bounce back with 8.8 percent growth rate next year and even regain its position as the fastest-growing emerging economy. The IMF also projected that India will surpass Bangladesh again in 2021. The Gross Domestic Product (GDP) for the first quarter ended June contracted 23.9 percent, revealing the extent of damage the pandemic and the subsequent lockdowns have caused to the country’s economy.