A day after the National Statistical Office (NSO) released India's GDP numbers for the second quarter of FY21, Nomura Holdings has upped the country's 2020 GDP forecast to -7.1 percent from -9 percent earlier.
The Japanese firm has revised the gross domestic product (GDP) forecast for India to (-)8.2 percent from previously predicted (-)10.8 percent for FY21.
India enters recession as GDP contracts 7.5% in July-September
India's GDP contracted 7.5 in July-September as per official data. The GDP data for April-June quarter was even worse. The Indian economy recorded a contraction of 23.9 percent.
With contraction in two consecutive quarters, India entered into a 'technical recession' - as pointed out by RBI Governor Shaktikanta Das.
However experts and economists have pointed towards a V-shaped recovery.
"The base effect is leading to a positive surprise on some of the numbers. The revival is indicating a V-shaped recovery. Financial, real estate, and professional services are among sectors that need to be looked at more closely," CNBC-TV18 quoted Chief Statistician Kshatrapati Shivaji.
Apart from the GDP contraction, India's eight core industries growth stood at (-)2.5 percent in October 2020, in comparison to (-)0.8 percent in September 2020. The data showed that the growth in the April-October 2020 in the eight-core sector was (-)13 percent in comparison to 0.3 percent on a yearly basis.
Also, September 2020's industries growth has been revised to (-)0.1% percent against -0.8% earlier (YoY).
Meanwhile, Chief Economic Advisor Krishnamurthy Subramanian opined that each of the high frequency indicators were doing well till February until COVID-19 hit.
"Services are in an expansionary phase despite travel and transport impacted by the pandemic. India is in expansionary phase both on manufacturing and services, IIP indicates this," CEA had said.
Economists from agencies - like ICRA, Motilal Oswal, Care Ratings, Emkay Wealth, CRISIL, Axis Securities and others - are expecting a revival in the Indian economy. However, they seem sceptical of the timeframe and have advised the government to be cautious while framing financial policies.