GDP to contract by 8.6% in Q2, India enters recession for first time: RBI
New Delhi : The Gross Domestic Product (GDP) of India is likely to contract by 8.6 per cent in the second quarter of the financial year, which means that India will enter into recession for the very first time in history in the first half of its fiscal, said Reserve Bank of India (RBI).
The researchers used 'nowcasting' method to estimate the figures ahead of an official data release.
Amid lockdown due to coronavirus pandemic, a contraction of 23.9 per cent was recorded in the April-June quarter.
The RBI has estimated that the economy will contract by 9.5 per cent for the full fiscal year.
"India has entered a technical recession in the first half of 2020-21 for the first time in its history with Q2 2020-21 likely to record the second successive quarter of GDP contraction," as per the article titled 'Economic Activity Index', authored by Pankaj Kumar of the Monetary Policy Department.
It, however, added that the contraction is "ebbing with gradual normalisation in activities and expected to be short-lived."
The official GDP data will be released by the end of this month.