Q3 GDP growth number: Covid-driven recession over, double dip ahead

GDP is implicitly projected by NSO to slip back into contraction of 1.1% in Q4FY21. This appears to be an outcome of the back-ended release in the Govt's subsidies that is on the anvil in Q4

With growth mercifully re-emerging in both GDP and the gross value added (GVA) in real terms in Q3 FY2021, the pandemic-induced technical recession in India has ended, in line with our expectations. Interestingly, the National Statistics Office (NSO) has pegged the pace of growth in Q3 FY2021 at 0.4 per cent for GDP, and a higher 1.0 per cent for the GVA, whereas we had projected the expansion in both these metrics at 0.7 per cent.

The performance of the services sector in Q3 FY2021 was in line with our expectation (-1.1 per cent), whereas industrial growth exceeded our forecast