Economy

The Indian economy experienced an economic shock and a public health crisis as a result of the coronavirus disease (COVID-19) pandemic and related restrictions from March 2020, and entered uncharted territory as it navigated global economic uncertainty and patterns of contraction and growth that marked the paths of most economies in 2020–22. In the last two quarters of fiscal year 2020/21 there was a resurgence of economic growth in the country. From the depths of the June quarter, when gross domestic product (GDP) shrank by 22.4%, there was sharp recovery in the next quarter (a fall of 7.3%), followed by growth of 0.4% in the December quarter and growth of 1.6% in the final quarter of 2020/21. For the full financial year, the country beat the gloomy forecast of negative growth of 8% and recorded a contraction of 6.6% in GDP. However, this was worse than the negative growth of 4.9% predicted for the global economy during 2020 by the International Monetary Fund (IMF) in its June 2020 update. In the fourth quarter Indian gross value added (GVA) grew at 3.7% year on year, after recording negative growth of 22.4% and 7.3% in the first and second quarters, respectively, and growth of 1.0% in the third quarter. For the full financial year 2021/22 India’s real GDP grew by 8.7%. In 2021/22 GVA grew at 8.1% and net taxes on products grew by 16.1%. In its April 2022 World Economic Outlook the IMF estimates the Indian economy will grow by 8.2% in 2022, compared to 3.6% for the global economy, 3.3% for the advanced economies, 4.4% for the People’s Republic of China and 3.8% for emerging and developing economies. The IMF has forecast India’s GDP to grow at 6.9% in 2023, while the Reserve Bank of India (RBI) has forecast GDP growth of 7.2% in 2022/23. GDP at the end of 2021/22 had surpassed the 2019 level.