India is set to post record fiscal first-quarter GDP — but the figure will not paint full picture
But that figure comes after India's economy contracted 24.4% for the same period last year due to a strict months-long national lockdown.
A motorcyclist wears a protective mask while sitting at the side of the road at the Sabarmati Riverfront in Ahmedabad, India, on Thursday, Oct. 22, 2020.India's economy is expected to have grown at a record pace in the three months that ended in June — but analysts point out that the data is unlikely to paint a full picture of the country's growth trajectory.this month predicted that gross domestic product rose 20% on-year for the April to June period — India's fiscal first quarter.
"The headline GDP growth number for April-June quarter ... will flatter to deceive," said Shuchita Shukla, a research analyst at The Economist Intelligence Unit. If the 20% forecast is realized, it would be India's fastest pace of growth since the country began measuring quarterly GDP in 1996. But, Tuesday's data comes after India faced a sharp contraction in the comparable year-ago period, when most of the country was under a strict national lockdown. India's economy contracted 24.4% during those three months.
Shukla said that the EIU's year-on-year growth projection is above 25% — higher than the consensus estimate in the Reuters poll. "More revealing will be the quarter-on-quarter rate, which we expect to show that India's economy contracted by 7% amid a devastating second wave of Covid-19."