Reasons Why Indian Economy Grew quicker than any other country in the world

The second wave of the coronavirus pandemic had taken the country by a storm with major cities going under a lockdown. However, the cases have decreased now and the cases have been receding in the major cities across India. Despite the Covid outbreak in the country, the Indian economy has been growing at a quick rate. Let’s look at the reasons why the Indian Economy Grew Quickest than any other country in the world.

Indian Economy – Latest News
Growth of GDP Post Lockdown
Economists’ projections of the Indian Economy after the second wave
Predictions on Consumer Behavior
Predictions of Economic growth after the 3rd wave
FAQ

Indian Economy – Latest News

The capacity of the Indian economy to recover would be tested by its ability to overcome from the deadly outbreak of Covid-19. However, no one has doubted the ability of the country to pull off the world’s fastest pace of growth compared to the other economies this year.

The economy which began on April 1 is expected to grow at a rate of 10% for the year 2021 according to estimation. This is after a lot of economists had cut down their predictions due to the lockdown during the recent weeks of April and May 2021. It was based on the restrictions on local activities, which include the political and commercial hub of India.

Growth of GDP Post Lockdown

When India had undergone one of the strictest lockdowns in the year 2020, it had seen an increase in the demand for goods and services from mobile phones to cars when it had reopened last year. The gross domestic product had grown 1% for the last three months which ended on 31 March 2021. This was the second straight quarter of expansion since the exit of India from a recession.

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Economists’ projections of the Indian Economy after the second wave

Most of the economists have cut down their economic growth projections after the beginning of the second wave in the country. ING Bank had cut down their projections from 9.2% to 7.8%, India ratings had cut down their projections from 10.4% to 10.1%. Barclays Bank had cut down their projections from 11% to 9.2%, Bloomberg economists had cut down their projections from 12.8% to 10.7%.

Predictions on Consumer Behavior

The downgrades from the economists are a message which conveys that the economy should not be taken for granted. Economists have conveyed that the relaxations of the restrictions across the country will analyze the strength of the economy to rebound and also the willingness to spend from the consumers will also act as a major key.

However, it is noted that even though the cases have decreased and the lockdown will be lifted in some parts of the country during the month of June but the consumers are considered to not spend so freely. This is due to the economic uncertainties and with the unemployment rates in the country are at their highest level.

QuantEco Research economist Yuvika Singhal who downgraded the full year growth of the economy by 150 basis points to 10%. She had conveyed that households would rather save than spend post lockdown.

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Predictions of Economic growth after the 3rd wave

The Reserve Bank of India has conveyed that the biggest hit of the second wave of the pandemic is the loss of mobility, employment and the purchasing power of the individual. The Central Bank has been trying to inject liquidity into the system and has kept the monetary policy loose.

The slow pace of vaccines and the lifting of lockdowns are going to weigh the recovery of the Indian economy. However, if the country is hit by a 3rd wave as mentioned by certain economists, it would increase the economic costs and drag down the economic growth to around 7%.

Conclusion

The growth of the Indian economy depends mainly on the consumers spending and the increase in the employment opportunities. It also depends on the vaccine availability as it is essential to revive the economy.

FAQ

Which country has the highest GDP?

United states that has the highest GDP around the globe with a GDP of 19 trillion.

What is India's GDP in 2021?

India's GDP is estimated to be likely around Rs 134.4 lakh crore.

Which sector contributes most to GDP of India?

Service sector contributes the most to the GDP of India.