Gross Value Added To Grow By 1.5% To 2% In Q4

The pace of commercial and business activity in the domestic activity is expected to gather pace on the back of vaccination driven optimism and policy support, CARE Ratings has said in a report post the GDP numbers.

"Although there is the vaccination driven optimism regarding the revival of commercial and business activity, domestic economic growth continues to be underscored by uncertainty given the resurgence in Covid infections across states that has raised the spectre of fresh pandemic restriction just as the economy is in the throes of recovery. We expect the Q4 GVA to grow by 1.5% to 2% in Q4. For FY21 as a whole we retain our earlier estimate and expect India's GDP to contract by -7.7% to -7.8%," the rating agency has said.

India belongs to the select club of economies along with China, Taiwan and Vietnam that have witnessed positive year- on - year growth in the three months of October -December'20, the rating agency has noted.

"There has been a faster than expected pickup in the global economies from the pandemic induced slump. Although most economies still continue to witness a contraction in economic growth from year ago period, there has nevertheless been a progressive strengthening in most economies in the last two quarters of 2020. Fiscal support and easy financing conditions has been supporting recovery across economies. There has also been a pickup in exports as well as consumer spending associated with the easing of pandemic restriction in various regions. Higher construction activity and industrial production has been boosting economic growth in advanced economies (US, Germany, China).

Even regions viz. in the Euro Area and North America, which have had continued and stricter lockdown measures, have witnessed better than expected economic growth in the last quarter of 2020 indicating that the pandemic restriction have been less economically disruptive," the ratings agency has noted.