GDP shrank 8.6% in Q2 pushing economy into recession: RBI

Context

• The index casts the GDP growth at (-) 8.6% in Q2, implying that India is likely to have entered a technical recession in the first half.
• According to the estimates of National Statistical the GDP in April-June declined to an
• India’s economy rebounded sharply in the wake of the reopening from lockdowns, slowing the pace of its contraction to 8.6% in the second quarter of the current fiscal year.
• The decline for two consecutive quarters is pushing economy into recession.

What risks exist against the recovery?

• Unrelenting pressure of inflation despite imports
• Second Covid-19 wave hurting global growth
• Intensifying stress amongst households, corporate

When the recession is said to exist?

• In economics, when the GDP growth rate is negative for two consecutive quarters or more, it is termed recession