RBI expects positive growth in second half of 2020-21

Reserve Bank of India (RBI) on December 4 said it expects the economy to record positive growth in the second half of the current financial year.

The economy contracted by 23.9% in the first quarter and 7.5%t in the second quarter on account of the COVID-19 pandemic.

“The second half is expected to show some positive growth,” RBI Governor Shaktikanta Das said, adding that during the financial year, as a whole, the economy was likely to contract by 7.5t, which is an improvement over its previous projection of 9.5% contraction.

In October, the RBI had projected the contraction in gross domestic product (GDP) at 9.5%.

Mr. Das said the GDP is expected to turn positive in the third quarter and expand at 0.1%. The last quarter is likely to see an expansion of 0.7%.

Hence, the growth in second half of the fiscal is expected to show a positive growth.

In its October monetary policy statement, RBI had said the real GDP growth in 2020-21 is expected to be negative at (-) 9.5%, with risks tilted to the downside (-) 9.8% in Q2 2020-21; (-) 5.6% in Q3; and 0.5% in Q4.