India in a Technical Recession
According to the central Bank’s Deputy Governor in charge of monetary policy Michael Patra and a team of economists, India’s economy doubtlessly shrank for a second straight quarter moving the nation into an unparalleled recession.
In September quarter, the GDP diminished to 8.6%, the Reserve Bank of India (RBI) showed in its first ever published ‘nowcast’ which is estimated on a basis of a high frequency data. There has been a downfall in the economy by 24% from April to June 2020.
In the published print of ‘nowcast’ the author wrote “India has entered a technical recession in the first half of 2020-21.” The government on the other hand is still due to publish official stats on November 27.
The ‘nowcast’ handed-down a wide range of index from automobile sales to flush banking liquidity to signal brightening prospects for October. The Indian economy will return to growth only if this surge is sustained by the end of October-December quarter.
A team of economists wrote to the Reserve Bank’s bulletin ‘There is a grave risk of generalization of price pressures, unanchoring of inflation expectations feeding into the loss of credibility of policy interventions.’
There is also high risk of global growth from a second wave of the Coronavirus pandemic.
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