How likely it is that Indian GDP could contract to negative in the June 2021 quarter?

One thing is certain that due to COVID 2.0, the GDP growth will be negative in Jun-21 quarter, although the extent of contraction is not known. However, we do have some early estimates coming from UBS. The Swiss broking and investment house expects GDP to contract -12% in the Jun-21 quarter. That is a tad worrying as it comes on the back of a weak GDP figure in the Jun-20 quarter, which was already racked by COVID 1.0.

To an extent, this will stem the positive growth story of the last two quarters. The Indian economy contracted overall by -7.3% and this contraction in Q1 could be therefore quite worrisome. Some of the high frequency indicators coming in June are showing signs of a recovery, but that would be too late to turn the fortunes of the first quarter. The good news is that UBS expects Sep-21 quarter to be a lot better on a sequential basis.