NEW DELHI: The Indian economy shrank by nearly a quarter in April-June, pointing to a longer than previously expected recovery with analysts calling for further stimulus.
Consumer spending, private investments and exports all collapsed during the world’s strictest lockdown imposed in late March to combat the Covid-19 pandemic and India now looks to be headed for its first full-year contraction since 1980.
GDP shrank by a record 23.9 per cent in April-June from a year earlier, official data showed on Monday. Krishnamurthy Subramanian, chief economist at the Ministry of Finance, said India’s economy was set for a “V-shaped” recovery and should perform better in the coming quarters as indicated by a pickup in rail freight, power consumption and tax collections.
Consumer spending dropped 31.2 per cent year-on-year in April-June compared to a 2.6 per cent fall in the previous quarter, data showed, while capital investments were down 47.9 per cent compared to a 2.1 per cent rise in the previous quarter.