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Upward revisions

If current trends are sustained, our economy may prove more resilient than many of us had reckoned

After Moody’s and Goldman Sachs, it’s Barclays that has upped its assessment of India’s economic path ahead, now that the worst of our covid crisis seems behind us. The London-based investment bank forecasts India’s growth in 2021-22 at 8.5%, up from its previous estimate of 7%. It also expects India’s gross domestic product to start expanding from the third quarter of 2020-21, in line with the Reserve Bank of India’s recent statement that the economy looks set to break out of contraction mode in the three months to 31 December.

It should be noted that 8.5% annual growth does not make up for an 8.5% shrinkage the previous year, as the economic base on which the calculation is made would have shrunk. So, our rate of growth next year would have to exceed the rate of contraction this year for our GDP to regain its 2019-20 level. Still, those upward revisions are heartening, especially when weighed against how much more damage would have been wrought had business activity not picked up as impressively as it appears to have in the past month or so. If current trends are sustained, our economy may prove more resilient than many of us had reckoned.

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