InvestorQ : How do you see the GDP for Q2 when it is announced on Friday 27 November evening?
Lavanya Subramanian made post

How do you see the GDP for Q2 when it is announced on Friday 27 November evening?

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Anamika Sodhani answered.
6 months ago
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Here is that you need to know ahead of the MOSPI announcing the actual GDP numbers for the Sep-20 quarter on November 27.

· Markets are rife with speculation about the likely rate of contraction in the second quarter. Remember, contraction is already a fait accompli.

· Going by the indicators like IIP, core sector and the PMI, there is some scope for being optimistic. Indications are that the GDP contraction could be less than expected.

· In the second quarter so far, based on high frequency data, manufacturing contraction was only 5.9%, compared to 35.7% contraction in Q1.

· Similarly, output of capital goods, with strong externalities, had contracted by only 13.6% in Q2, compared with 65.34% in Q1.

· Leading economists expect GDP to have contracted by 8% in Q2, while some are going as good as 7% based on the high frequency data.

· In the first six months of the fiscal, government spending and rural demand appear to have saved the day even as GST collections are back to pre-COVID levels.

· If the final GDP contraction in Q2 is less than the originally anticipated 10.5%, that should come as a major boost to the Indian economy.

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