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India’s economy contracted 7.5% between July and September, ranking among the worst among major developed and emerging economies, as the country entered recession for the first time since independence, data shows official today.
While the numbers represent an improvement from the record 23.9% contraction last quarter, they indicate that Asia’s third-largest economic power is bracing for an uphill battle as it tries to revive demand and create jobs despite the high number of new infections with the Corona virus. .
The recording of the contraction for two consecutive quarters means that the country is now entering a “technical recession” for the first time since 1947.
After the imposition of lockdowns around the world, the growth of major economic powers, including the United States, Japan and Germany, in the quarter that ended on September 30, raised expectations that India will also experience a recovery.
But as consumer affairs have improved thanks to higher spending ahead of the holiday season in October and November, hopes of a broader recovery could be dashed by damage to the construction and construction sectors. hotel.
The agricultural sector has been relatively dynamic, while industrial activity increased during the period from July to September, after collapsing by around 40 percent in the previous quarter due to the shutdown.
Analysts found the figures encouraging, indicating that the economy is likely to fare better in the next quarter of the year.
Samir Narang, chief economist at the state-owned Bank of Broda, said: “The worst is over for the Indian economy, given all the indicators.” We will see continuous improvement. “
He told France Press that Friday’s data exceeded the bank’s expectations of an 8% contraction, and stressed that the economy was on the verge of recovering, unless the high number of infections failed. lead to a new closure.
New Delhi has struggled to revive its economy, which is expected to contract 9.5% this year, according to estimates released by India’s central bank governor Shaktikanta Das last month.
For its part, the International Monetary Fund has forecast India’s economy to contract 10.3% this year, in the biggest slowdown of any major emerging economy and the worst since independence.
A report released by “Oxford Economics” earlier this month said India’s economy would be hardest hit even after the severity of the epidemic decreased, indicating that annual output will be 12% below levels of ‘before the virus until 2025.
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