India in 'Technical Recession' for 1st Time in History, Says RBI in 'Nowcast'; July-Sept GDP to Contract 8.6%

For the first time in history, India’s economy has entered a “technical recession” in the first half of 2020-21, a team of economists, including Michael Patra, Reserve Bank of India’s deputy governor in charge of monetary policy, stated.

According to the economists, the economy shrank for the second straight quarter. The government had in August reported a 23.9 percent contraction in its Gross Domestic Product (GDP) for the April-June quarter. The central bank has ‘nowcast’ that Gross Domestic Product (GDP) for the July-September quarter is set for a contraction of 8.6 percent.

‘Nowcasting’ is the prediction of the present or the very near future of the state of the economy.

“India has entered a technical recession in the first half of 2020-21 for the first time in its history,” the economists wrote. The government is due to publish official statistics on November 27.

Moody’s have also revised India’s 2020 GDP target. According to them, a decline of 8.9% is expected now as against the previous forecast of 9.6%.

The median forecast in a Bloomberg survey of economists sees a contraction of 10.4% in the July-September quarter.

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