India’s economy has slipped into a recession for the first time in several decades.
According to official data released on Friday, the Asian nation’s economy contracted 7.5 percent between July and September, performing the poorest among major advanced and emerging economies and entering a technical recession for the first time since independence.
Although the figures were an improvement on the record 23.9-percent contraction recorded last quarter, they indicate that the economy is in for a tough fight as it attempts to revive demand and create jobs even as coronavirus infections climb.
The two successive quarters of contraction mean that Asia’s third largest economy has now entered a “technical recession”.
“With a view to contain the spread of the Covid-19 pandemic, restrictions were imposed on the economic activities not deemed essential during [the first quarter],” the Indian Ministry of Statistics said in a statement on Friday.
“Though the restrictions have been gradually lifted, there has been an impact on the economic activities.”
New Delhi has struggled to kick-start an economy that is expected to shrink 9.5 percent this year, according to estimates released by India’s central bank governor Shaktikanta Das last month.
The COVID-19-induced shutdown in the country left huge numbers of people jobless almost overnight, including tens of millions of migrant workers in the shadow economy.
The government has since been easing restrictions to revive activity, announcing two stimulus packages to offer farmers easier access to credit and dole out benefits to small-scale businesses.
In a speech Thursday, central bank governor Das warned that the recent surge in virus cases and the imminent threat of new lockdowns posed further risks to the economy.
“We need to be watchful about the sustainability of demand after the festivals and a possible reassessment of market expectations surrounding the vaccine,” Das said.
The coronavirus has continued to ravage the country, which has registered more than 9.3 million cases and over 135,000 deaths.