Economic recovery in India gained momentum after localised lockdowns were lifted after the second wave, but is 'incomplete', according to a report by rating agency ICRA, which said the economy will grow in double digits for the April-June period on the low base of 2020-21 but will still be short of the levels observed in the first quarter (Q1) of fiscal 2019-20 (FY20).
''...the real GDP [gross domestic product] in Q1FY22 will trail the Q1FY20 level while recording a double-digit YoY (year-on-year) expansion,'' it said in the report.Economic recovery in India gained momentum after localised lockdowns were lifted after the second wave, but is 'incomplete', according to a report by rating agency ICRA, which said the economy will grow in double digits for the April-June period on the low base of 2020-21 but will still be short of the levels observed in the first quarter of fiscal 2019-20.#
The nationwide lockdown had led to a 23.7 per cent contraction in the GDP in the June quarter of FY20 and was also one of the prime reasons for the 7.3 per cent contraction in FY21, a newswire reported citing the ICRA document.
ICRA said the phased lifting of state-wise restrictions has ushered in a recovery in the economic momentum but the performance of most high-frequency indicators in June 2021 remained below the pre-COVID-19 levels of June 2019 and also before the peak of the second wave in April 2021.
ICRA chief economist Aditi Nayar said the YoY performance of 13 of the 15 high-frequency indicators expectedly flattened in June 2021, relative to May 2021 and several indicators recorded a sequential improvement in June 2021, as the states started lifting restrictions with the subsiding of the second wave of COVID-19.
''While this confirms that a revival has set in, volumes for most non-financial indicators in June 2021 were weaker than the levels in both April 2021 and June 2019, suggesting that the recovery is incomplete,'' she added.
After comparing volumes across sectors in June 2021 with both June 2019 and April 2021, the agency pointed that discouragingly, the volumes in June 2021 trailed the June 2019 level for eight of the 13 non-financial indicators.
They were weaker than April 2021 for nine indicators, highlighting that while recovery has undoubtedly set in, it remains incomplete, ICRA said.
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