GDP numbers quite encouraging, recovery will continue if pandemic remains controlled: CEA KV Subramanian
Nov 27, 2020
New Delhi [India], November 27 : With the contraction of the Indian GDP by 7.5 per cent in July to September quarter (Q2 FY21), Chief Economic Advisor (CEA) KV Subramanian on Friday said sharp recovery can be seen in the manufacturing sector but given the uncertainty, it would be difficult to say whether GDP will hit positive in Q3 or Q4.
"My sense is that we will definitely continue with the recovery in GDP numbers if pandemic remains under control. Indian economy had picked up momentum by February 2020, only to be halted by COVID-19 outbreak. The Q1 GDP contraction was primarily due to the stringent lockdown," Subramanian said.
The CEA was briefing on Q2 GDP numbers which was released today. India's GDP growth contracted by 7.5 per cent in Q2 after a record slump of 23.9 per cent in the previous quarter (Q1).
"Economic recovery gives us optimism, but caution is required in regard to both the economy and pandemic. The GDP estimates are more encouraging than what was anticipated by most commentators," Subramanian added.
He said that the index of core industries shows that production has been an engine of growth, helping the recovery process.
"Data on user industries show a V-shaped recovery. While mining has not recovered yet, manufacturing and electricity sectors have improved. The economic recovery is reflected in the corporate sector too and food inflation expected to come down in Q3," Subramanian said.
