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India is set to post record fiscal first-quarter GDP — but the figure will not paint a full picture

  • More than 40 economists polled by Reuters this month predicted that gross domestic product rose 20% for the April to June period.
  • But that figure comes after India's economy contracted 24.4% for the same period last year due to a strict months-long national lockdown.

A motorcyclist wears a protective mask while sitting at the side of the road at the Sabarmati Riverfront in Ahmedabad, India, on Thursday, Oct. 22, 2020.Sumit Dayal | Bloomberg | Getty Images

India's economy is expected to have grown at a record pace in the three months that ended in June — but analysts point out that the data is unlikely to paint a full picture of the country's growth trajectory.

More than 40 economists polled by Reuters this month predicted that gross domestic product rose 20% on-year for the April to June period — India's fiscal first quarter. Official data is due Tuesday around noon GMT. India's fiscal year begins in April and ends in March the next year.

"The headline GDP growth number for April-June quarter … will flatter to deceive," said Shuchita Shukla, a research analyst at The Economist Intelligence Unit.

If the 20% forecast is realized, it would be India's fastest pace of growth since the country began measuring quarterly GDP in 1996. But, Tuesday's data comes after India faced a sharp contraction in the comparable year-ago period, when most of the country was under a strict national lockdown. India's economy contracted 24.4% during those three months.

Shukla said that the EIU's year-on-year growth projection is above 25% — higher than the consensus estimate in the Reuters poll. "More revealing will be the quarter-on-quarter rate, which we expect to show that India's economy contracted by 7% amid a devastating second wave of Covid-19."

In the three months between January and March, India's economy grew 1.6% compared with a year earlier.

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