A fragile recovery
Our economy’s pace of expansion would be easier to forecast and push up once the pandemic is no longer in a position to spin out of control
After positive gross domestic product growth data for the three months to June, indicators for subsequent months point to continued hiccups on our way out of a severe covid contraction that has cost us two years of economic emergence. The manufacturing purchasing managers’ index for India slipped to 52.3 in August, but stayed above the 50 level that marks expansion. Our goods and services tax intake clocked its second consecutive above- ₹1 trillion reading in August, while core-sector data showed a good 9.4% expansion in July. Some big carmakers did see August sales slip, but this had more to do with a chip shortage than any domestic factor.
On the whole, the current quarter of 2021-22 needs to not just sustain the first quarter’s growth momentum but also enhance it to bring the central bank’s annual growth estimate of 9.5% within reach. There are some headwinds, reminders of the fragility of our recovery, but the recent pick-up in our vaccination drive could reduce the influence of covid uncertainty. Our economy’s pace of expansion would be easier to forecast and push up once the pandemic is no longer in a position to spin out of control.
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