The Indian economy is expected to rebound with an 8.9 per cent growth in the next fiscal after economic activity showed significant improvement in the last quarter, according to IHS Markit, which recently said the country’s industrial production and consumption expenditure witnessed a rebound during the fourth quarter of calendar year 2020.
The economy will contract by 7.7 per cent in this fiscal, the worst performance in four decades, the National Statistical Organisation (NSO) has predicted.
“The worst contraction occurred during the period from March until August [last year], with the economy having shown a strong rebound in economic activity since September,” a news agency quoted IHS Markit as saying in a note.
The GDP contracted by a record 23.9 per cent in the April-June quarter following a national lockdown to prevent the spread of the coronavirus. The contraction came down to 7.5 per cent in the September quarter.
“October data showed that industrial production grew by 3.6 per cent year-on-year compared with a steep contraction of -55.5 per cent in April 2020,” the company said.
Stating that there has been a marked improvement in business conditions across the manufacturing sector, it said factory orders increased during December on the back of the loosening of COVID-19 restrictions, strengthening demand and improved market conditions.
“With the Indian economy already showing a significant improvement in domestic economic activity in the fourth quarter of 2020, the outlook is for Indian GDP growth to rebound by 8.9 per cent year on year in the 2021-22 fiscal year,” it added.