India’s economy grew at a record pace in the second calendar quarter. Even as the country grappled with a devastating wave of Covid-19, GDP rose 20.1% in the three months to June 30, compared with a record contraction in the same quarter a year earlier.
“The record year-on-year rise in Indian GDP in Q2 was due to base effects,” wrote Shilan Shah, senior India economist at Capital Economics in a research note.
The economic growth likely touched a record high in the quarter through June, reflecting a weak base last year and a rebound in consumer spending, a Reuters poll found. The rebound came despite the drag from the deadly second wave of the coronavirus, which forced states across India to reimpose localized lock downs and stop mobility completely from late April to early June.
“Humanitarian costs of the health crisis were high, but the economic impact was less severe than the first wave and activity rebounded faster,” said Radhika Rao, economist at DBS Bank.
According to Nomura analysts there are positive signs as well: India’s vaccination rate has picked up, with the country on track to fully vaccinate about half of the population by the end of the year.
