India’s economy shrinks sharply in the second quarter of the year based on official data. The decrease by 23.9% is the worst that’s recorded since 1996 when the country began releasing its quarterly data. The coronavirus pandemic resulted to adverse effects in India’s economic activity during the quarter. Experts fear it will face a recession if the economic contraction will continue in the next quarter.
Almost every segment, including hotels, trade, electricity generation, manufacturing, and construction, has showed a sharp contraction within the three-month period. It’s only the agriculture sector that has gained a 3.4% growth.
The pandemic worsened the current economic challenges of India. In 2019, unemployment hit a 45-year high and growth decreased to 4.7%, the lowest in six years. 121 million Indians lost their jobs in the first month of the lockdown as reported by the Centre for Monitoring Indian Economy (CMIE). However, CMIE also reports that an estimated 10 million of those jobs have returned when the economic activity resumed in June. Experts believe that majority of these jobs are in the informal sector, mostly in agriculture.