India's economy showed momentum before virus crisis hit home

[NEW DELHI] India's economy expanded faster than expected last quarter before a resurgent coronavirus pandemic unleashed a new wave of challenges.

Gross domestic product rose 1.6 per cent from a year earlier in the three months ended March, the Statistics Ministry said Monday. That was faster than the 1 per cent median estimate in a Bloomberg survey of economists.

The number marks the second straight quarter of expansion following a rare recession, which tipped the economy into an unprecedented 7.3 per cent contraction for the full fiscal year ended March. That compares with a median 7.5 per cent decline estimated in a Bloomberg survey.

While pent-up demand for everything from mobile phones to cars revived consumption in Asia's third-largest economy after it reopened last year from one of the strictest lockdowns that lasted more than two months, India's status now as the global virus hotspot could hurt those prospects. It could temper what will be fastest pace of growth among major economies this year.

India's GDP will grow 10 per cent in the year that began April 1, according to the median of 12 estimates compiled by Bloomberg News. That's after several economists downgraded their forecasts in recent weeks to factor in local curbs on activity, including in India's political and commercial hubs.

BLOOMBERG