World news – IN – GDP shrank 86% in Q2 pushing economy into recession: RBI

India’s economy rebounded sharply in the wake of the reopening from lockdowns, slowing the pace of its contraction to 86% in the second quarter, a ‘nowcast’ in the RBI’s monthly bulletin showed on Wednesday

Still, the estimate implies that India is likely to have entered a technical recession in the first half of 2020-21 for the first time in its history with two successive quarters of GDP contraction, wrote an RBI official who authored an article in the bulletin

An Economic Activity Index, which tracks real-time data from 27 monthly indicators, showed the economy had rebounded sharply from May/June, with industry normalising faster than contact-intensive service sectors, pointing to a short-lived contraction

“The index nowcasts GDP growth at (-) 86% in Q2, implying that India is likely to have entered a technical recession in the first half,” Pankaj Kumar of the RBI’s Monetary Policy Department wrote in the article titled ‘An Economic Activity Index for India’

“At a time when global economic activity is besieged by the outbreak of the second wave of COVID-19 data for the month of October 2020 have brightened the near-term outlook for the Indian economy and stirred up consumer and business confidence,” the RBI noted “There are, however, formidable downside risks that confront the path of recovery,” it added

Observing that “the unrelenting pressure of inflation” was the foremost risk, the RBI warned that a hit to external demand from the second wave and financially stressed households and companies could also undermine the recovery

We have been keeping you up-to-date with information on the developments in India and the world that have a bearing on our health and wellbeing, our lives and livelihoods, during these difficult times To enable wide dissemination of news that is in public interest, we have increased the number of articles that can be read free, and extended free trial periods However, we have a request for those who can afford to subscribe: please do As we fight disinformation and misinformation, and keep apace with the happenings, we need to commit greater resources to news gathering operations We promise to deliver quality journalism that stays away from vested interest and political propaganda

Your support for our journalism is invaluable It’s a support for truth and fairness in journalism It has helped us keep apace with events and happenings

The Hindu has always stood for journalism that is in the public interest At this difficult time, it becomes even more important that we have access to information that has a bearing on our health and well-being, our lives, and livelihoods As a subscriber, you are not only a beneficiary of our work but also its enabler

We also reiterate here the promise that our team of reporters, copy editors, fact-checkers, designers, and photographers will deliver quality journalism that stays away from vested interest and political propaganda

‘We are working with five leading banks in India: ICICI Bank, HDFC Bank, Axis Bank, the State Bank of India, and Jio Payments Bank People can send money on WhatsApp to anyone using a UPI-supported app,’ according to a blogpost

Reserve Bank of India, Gross domestic product, Recession