The country's gross domestic product (GDP) is likely to grow around two per cent in the January-March quarter of the financial year 2020-21 and could register a contraction of around 7.3 per cent for the entire fiscal, according to a domestic credit rating agency ICRA. From the gross value-added perspective, the rating agency pegged the economic growth for the fourth quarter at three per cent and a 6..3 per cent contraction for the full year. (Also Read: India's GDP Growth To Be Around 1.3% In March Quarter With Downward Bias: Report )
According to the credit rating agency, the projected GDP growth of two per cent will help the economy avoid a double-dip recession phase, as hinted by the National Statistical Office or NSO for the March quarter. The agency's growth projection is better than the eight per cent contraction predicted by the National Statistical Office. The NSO foresees the economic growth in the fourth quarter at only 1.1. per cent.
ICRA's baseline expectation is that the gross value-added (GVA) of defence, public administration, and other services will grow at nine per cent in the March quarter from a de-growth of 1.5 pe rcent in the third quarter of fiscal 2020-21.
Aditi Nayar, Chief Economist, ICRA stated that the better-than-expected numbers are attributed to the widespread recovery in volumes from the low base amid the COVID-19 nationwide lockdown in March 2020. On balance, the chief economist expects the growth in manufacturing GVA to rise to four per cent in the March quarter from 1.6 per cent in the third quarter of fiscal 2020-21.