What will India's gross domestic product (GDP) be in the second quarter?

Previously, many economists predicted that it could reach more than 16%, and now the answer is revealed.

  The Central Bureau of Statistics of India announced on August 31 that from April to June this year, India's economy was about 36.85 trillion rupees, a year-on-year increase of 13.5%.

Although the data is lower than market expectations, it is already very eye-catching to achieve double-digit growth.

  In the second quarter of last year, India was in the midst of the second wave of the epidemic, so the base was low.

This year, the impact of the epidemic has faded, and the service industry has recovered rapidly, contributing a lot to the economy.

However, judging from preliminary data for July, India's economic data has fallen.

At the same time, high inflation hinders consumption and inhibits the further recovery of the Indian economy.

  Liu Zongyi, secretary general of the China and South Asia Research Center of the Shanghai Institutes for International Studies, told Yicai.com that uncontrollable inflation is an "old problem" in India's economic development, especially during periods of rapid economic growth.

In the first half of the year, India's inflation jumped significantly, and the Indian government has stepped up its intervention.

The growth rate ranks first in the G20

  India's GDP grew by 13.5% in the second quarter, the fastest growth rate in the G20 this quarter.

In second place is Saudi Arabia. Although stimulated by high oil prices, Saudi Arabia’s GDP grew by 11.8% year-on-year in the second quarter, slightly slower than India’s.

  India Ratings and Research had forecast growth of 13.3% in the second quarter ahead of the data, the closest to the actual data.

Its chief economist Devendra Kumar Pant said that the reason why GDP growth remained at double digits in the second quarter was mainly due to the base effect, which was lower in the same period last year.

  From April to June 2021, India was hit by the second wave of the epidemic caused by the delta virus strain. The epidemic peaked in May and eased by the end of June. Pillar industries including manufacturing and service industries were affected. Serious impact.

  Aditi Nayar, chief economist at Indian investment and rating agency ICRA, believes that domestic consumer demand for services and a recovery in export industries have led to relatively modest growth in Indian industry.

  Since the end of last year, India has basically lifted the control measures of the epidemic, and the service industry has been able to recover rapidly.

Data show that from April to June, India's service industry grew by 25.7% year-on-year.

The services sector contributed more than two-thirds of economic growth in April-June, said Radhika Rao, senior economist at DBS.

  The second quarter of the calendar year 2022 is the first quarter of India’s fiscal year 2022, which runs from April 1 of the current year to March 31 of the following year.

future direction

  The rapid economic growth has made the Indian government appear very confident.

Indian Prime Minister Narendra Modi on August 15 even set a timetable for when India will become a developed country.

"We have to turn India into a developed country within the next 25 years, within our lifetime," he said.

  International institutions, however, are much cooler.

After the results were announced, institutions including Goldman Sachs and Morgan Stanley lowered their economic growth forecasts for India this year.

  Goldman Sachs pointed out that India's economic growth in April-June was lower than expected, economic growth momentum is weakening, and India's economic growth in 2022 may be lowered to 7% from the previous 7.6%.

Investment and net exports were a bigger-than-expected drag on India's economic growth, according to Morgan Stanley analysis.

  The economic growth prospects of developed economies, including Europe and the United States, are gloomy, and India's exports will be severely affected.

In the August monthly economic report and the minutes of the monetary policy meeting released by the Reserve Bank of India recently, both the gloomy outlook for world economic growth and the intensification of geopolitical conflicts are unfavorable factors for India's economic growth.

  Weak employment has also weighed on India's economic recovery.

With unemployment stubbornly high and real wages at record low levels, domestic consumption in India may not be enough to fuel further growth, said Kunal Kumar Kundu, an India economist at Societe Generale, although the economy is growing rapidly, he said. At this rate, it is still not enough to accommodate the 12 million new workforce each year.

  The pace of growth in India's economy has slowed significantly since July.

Institutions including the Reserve Bank of India predict that India's economic growth may only be around 6.2% in the July-September period.

Some institutions have already pointed out that the RBI's 7.2% economic growth forecast for India for the whole year will have to be lowered.

  The International Monetary Fund (IMF) also slightly revised down India's economic growth forecasts for this year and next to 7.4% and 6.1% in July this year, down 0.8% from the April report.

But even so, India's GDP growth rate is still far ahead, second only to Saudi Arabia's 7.6%.