NEW DELHI: The Indian economy returned to growth in three months to December, with GDP expanding 0.4% after two consecutive quarters of contraction led by pandemic-induced disruptions, as per data from the National Statistical Office (NSO) on Friday.
Growing 0.4% last quarter, India ended a technical recession.
Also Read | The limits to India’s privatization push
The NSO revised GDP prints for June and September quarters to -24.4% and 7.3% respectively from earlier estimates of -23.9% and -7.5%. For FY21, NSO expects the GDP to contract 8% compared to an earlier projection of a decline of 7.7%, signalling weaker than expected rebound in the March quarter.
While ICRA Ltd and HDFC Bank had expected a mild recovery in economic activity with projected GDP growth of 0.7% and 0.8% respectively for December quarter, IDFC Bank had expected a growth of 1.8%.
During the December quarter, manufacturing grew 1.6% while public expenditure contracted 1.5% which could have dragged down overall GDP growth. Contact services, including trade, hotel, communications shrunk 7.7% while construction bounced back to grow at 6.2% during the quarter.
Lower-than-expected GDP growth may force professional forecasters to revise their projections for FY22.
As of now, rating agency Moody’s has forecast a 13.7% economic growth for FY22 while the Reserve Bank of India and Economic Survey have more modest estimates of 10.5% and 11% respectively. The International Monetary Fund has forecast 11.5% GDP growth for FY22.
Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.