A second consecutive quarter of economic growth for India

India’s real GDP increased by 1.6% y/y in Q1 2021, expanding further from Q4 2020 that registered a growth of 0.5% y/y, thereby registering a decline of 7.3% y/y for the whole fiscal year FY2021, ending in March 2021. The growth for Q1 2021 was powered by favourable base effects, continued economic policy support, and the vaccination drive.

India’s real GDP increased by 1.6% y/y in Q1 2021, expanding further from Q4 2020 that registered a growth of 0.5% y/y

Even though the quarter witnessed growth, many of the high-frequency indicators that had picked up momentum in Q4 2020 moderated in the first two months of 2021, such as industrial production. Many indicators only experienced an increase on account of a low base. The worsening COVID-19 situation by the end of March 2021 dented the economic recovery process.

India’s real GDP increased by 1.6% y/y in Q1 2021, expanding further from Q4 2020 that registered a growth of 0.5% y/y, thereby registering a decline of 7.3% y/y

However, since the second wave peaked in the month of April, the major economic impact will be borne by Q2 2021, which is likely to moderate the high growth estimated for Q2 2021.

Source: CEIC, Central Statistics Office

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