India's Gross domestic product (GDP) may turn positive at 1.3 percent in the third quarter of 2020-21, having seen contraction in the previous two quarters on account of the coronavirus pandemic, as the number of cases is falling and public spending has started rising, according to a report.
The government will release the GDP numbers for the October-December quarter of the current fiscal on Friday. Projecting that the gross domestic product may have returned to the black in the last quarter of the calendar year 2020, DBS Bank in the report said the full-year growth in real terms may be at a negative 6.8 percent.
DBSGroup Research economist Radhika Rao said sharp improvement in the COVID-19 situation and rising public spending are the two factors that bode well for December 2020 quarter. India posted de-growth of 24 percent and 7.5 percent in GDP in the first and second quarters ended June and September 2020, respectively. The unlocking saw domestic demand benefit from festive tailwinds, pent-up consumption and pick-up in capacity utilization alongside resumption in sectoral activities, DBS Research said. The Economic Survey 2020-21 has projected the economy to grow 11 percent in the next fiscal beginning April 1, a shade higher than the RBI's projection of 10.5 percent. However, the International Monetary Fund (IMF) expects India to grow at 11.5 percent in 2021.
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