The Indian economy has grown 8.4% in the second quarter (July - September) of the ongoing financial year (FY) 2021 - 2022, in the latest sign that the economy is recovering from the most devastating effects of the ongoing pandemic. Last quarter (April 2021 - June 2021), the economy grew 20.1%, which was the single largest quarterly percentage growth since quarterly number started being reported in 1996.
The current number reflect the economic activity that ensued in the economy after most restrictions eased and the country increasing pace on vaccination against COVID-19.
However, the nuance lies in how these numbers are reported. These quarterly numbers are reported relative the same quarter in the last financial year implying the current growth number is reported over July to September 2020. In that quarter, India declined 7.4%, which plunged it in a technical recession, meaning that a favourable base effect has lent itself to the current pace of growth. Similarly in the first quarter, the 20.1% growth figure was based on a 24.4% contraction in the same quarter last year.
Also Read: India's GDP Grows 20.1% In Q1 FY22, Helped By Low Base Effect
"GDP at Constant (2011-12) Prices in Q2 2021-22 is estimated at ₹35.73 lakh crore, as against ₹32.97 lakh crore in Q2 2020-21, showing a growth of 8.4 percent as compared to 7.4 percent contraction in Q2 2020-21", said the release by the National Statistics Office of the Ministry of Statics and Program Implementation which released these numbers.
These numbers are in line with what economists estimated. A Reuters poll of 44 economics had a median estimate of 8.4% growth in the second quarter of the ongoing financial year. The Reserve Bank of India's estimate for this quarter was 7.9%.
Further, the income side of various sectors of the economy, measured by the gross value added, grew 8.5% quarterly (again measured over the same period in the previous year). For the full financial year, the Reserve Bank of India and the International Monetary Fund have estimated a growth of 9.5%.
Also Read: IMF Cuts India's GDP Growth Projections To 9.5% From 12.5% In April
However, a new threat loom over global economy's nascent recovery in the from of a resurgence of cases in Europe, and the omicron variant of the coronavirus first reported in South Africa. A worst case scenario - where the variant plunges large portions of the world into lockdown again - could see the world economy growing at just 2.3% instead of 4.5% in 2022. A "modest" hit by the variant would be of nearly 0.25 percentage points off growth.
Find the National Statistical Office's release here.