India Q2 GDP Preview: A Slow Climb After A Great Fall

India will enter a technical recession this week with the economy set to contract for a second consecutive quarter. The pace of contraction, though, is likely to be significantly below what was seen in the first quarter of the year. GDP data for the July-September quarter is due to be released on Friday.

Indias GDP contracted by a record 23.9% in the April-June quarter when a nationwide lockdown brought vast swaths of the economy to a halt. Even though economic activity picked up in the July-September quarter, a contraction in GDP is inevitable.

The GDP data, however, is backward looking and what economists will be watching for is an improvement in activity between the first and second quarters.

The recovery in activity in Q2 FY21 is likely broad-based, according to Rahul Bajoria, chief India economist at Barclays, who estimates GDP will contract by 8.5%.