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Indias Economy Grows 0.4 yy in OctDec Quarter

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BENGALURU, Feb 26 Reuters Indias economy expanded by 0.4 yearonyear in the OctoberDecember quarter, returning to growth after shrinking for two straight quarters, government data showed on Friday.

The readout for the December quarter was a tad lower than the 0.5 growth forecast of analysts in a Reuters poll.

COMMENTARY

KUNAL KUNDU, INDIA ECONOMIST, SOCIETE GENERALE, BENGALURU

The Indian economy has turned a corner during 4Q20, growing by 0.4 yoy, slightly lower than the consensus expectation, though we expected one final quarter of contraction.

To us, the data appears to be at variance with the high frequency data. Disaggregated data shows that domestic consumption continued to contract while real government spending dipped too, albeit marginally.

A sharp pick up in investment enabled the economy to record a marginally positive growth as did a lower trade deficit on account of lessthanrobust economic activity. Going forward, we believe that investment and not consumption will be Indias growth driver.

SAKSHI GUPTA, SENIOR ECONOMIST, HDFC BANK, GURUGRAM

Q3 GDP was slightly lower than expectations, albeit showed that the economy did move into the green. Going ahead, we are likely to see a continuation of a Kshaped recovery with some sectors growing faster than others.

We expect growth to print at 1.5 in Q4 and 7.5 for the whole year FY21. We expect GDP for FY22 at 11.5. We expect the economy to reach prepandemic output levels by the end of the calendar year…

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