01-01-1970 12:00 AM | Source: Accord Fintech
India’s GDP set to revert to growth territory in Q3FY21: ICRA
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ICRA Ratings in its latest report has said that after two consecutive quarters of contraction, India's Gross domestic product (GDP) is set to revert to the growth territory in the October-December 2020 period (Q3FY21) compared to the year-ago period. It also said private consumption and government spending will help the economy post a turnaround during the December quarter and the GDP will grow 0.7 percent. It can be noted that the economic growth has been on a downward spiral for over three years till it went into a contraction mode.

The rating agency has stated that the forecasted growth in Q3 FY21 while undoubtedly mild and uneven is nevertheless welcome as it signifies that the economy has exited the COVID-19 pandemic-induced recession after two tumultuous quarters. It said the revival in central government spending supported the Indian economy's exit from the recession in Q3 FY21 and pointed out that after a decline of 14.2 percent in Q2FY21, the government of India's (GoI's) non-interest revenue expenditure rose by 22.9 percent in Q3 FY21.

According to the report, almost all the non-agricultural lead indicators tracked by the agency recorded a continued, albeit uneven, improvement in volume terms in the December quarter on continued unlocking of the economy, uptick in consumption during the festive season, and central government spending. It also said that most of the tracked indicators rebounded to a growth on a year on year basis in the December quarter although this was on the low base of Q3 FY20, and that aviation was among the outlier which continued to contract.