GDP data: Contraction can be ignored, but pre-Covid declining trend irksome

While the country is now technically in a recession with two successive quarters of negative growth, it should not be worrisome as this is the case across the globe with China being the only exception

As the nation got into the ‘unlock’ mode, it was expected that growth in its gross domestic product (GDP) would improve sequentially, so the September-quarter contraction rate of 7.5 per cent does not come as a surprise, though it is better than our expectation of 9.9 per cent. The buzz around high growth in sales in the consumer segment during the festival-cum-harvest season has had its mirror image partly in the production numbers of September, as companies prepared for the same. Hence, the December quarter would be the test for sustenance of the revival seen in the last few months.