India is on the way to achieving the fastest economic growth rates, going to overtake the whole world, as evidenced by the indicators of the country’s gross domestic product (GDP). This is reported by Bloomberg.
India’s GDP grew by 20.1 percent in the second quarter compared to a year ago, which is slightly below the forecasts of economists who had expected growth of 21 percent. The report of the Ministry of Statistics and Program Implementation showed that in the second quarter, growth was observed in various sectors of the economy. In the trade, hotel and transport sectors, it was 34.3 percent, in construction-68.3 percent. The agro-industrial complex grew by 4.5 percent, the industrial complex-by 49.6 percent. The Indian rupee rose to its peak values since May, and stock indexes reached a new high.
Economic growth remained at 9.2 percent according to the GDP forecast for 2021, becoming the fastest among major economies, exceeding the 8.5 percent growth mark of China. High rates of vaccination against coronavirus allowed people to lead a habitual lifestyle and reduce damage in the service sector, and production indicators were higher than expected, which contributed to record growth rates.
The impact of the restrictions caused by the pandemic was less serious than in 2020, which allowed the economy to quickly restore demand. According to data from the Reserve Bank of India, in July, loans for consumer durables, car purchases, real estate and small businesses increased both on a monthly and annual basis. Business leaders in July noted an increase in the number of new orders, a similar survey of purchasing managers in the service sector showed that the sector is gradually expanding, which only confirms the presence of demand. In addition, exports, which account for almost a fifth of the economy, have grown over the past eight months, indicating high global demand.
The threat of a third wave of the pandemic did not allow the country’s Central Bank to curtail its monetary policy with record low interest rates, which were introduced to support the economy. Prime Minister Narendra Modi plans to supplement monetary stimulus with fiscal measures. The government intends to raise 6 trillion rupees ($81.9 billion) by leasing public infrastructure over the next four years to finance new expenditures without further increasing the budget deficit.
