India's economy is projected to shrink 7.5% in the current fiscal year through March, its central bank governor said on Friday, upwardly revising an October forecast for a 9.5% contraction.
The economy "is recuperating faster than anticipated", Reserve Bank of India Governor Shaktikanta Das said after the bank's Monetary Policy Committee meeting.
The second half of the ongoing fiscal year "is expected to show positive growth", 0.1% on the year in the October-December quarter and 0.7% in January-March, he added, Nikkei Asian Review reported.
Recovering rural demand is expected to strengthen further, while urban demand is gaining momentum as the unwinding of coronavirus-related restrictions "spurs activity and employment, especially for labor displaced by Covid-19", he said.
"These positive impulses are, however, clouded by a possible rise in infections in some parts of the country, prompting some local containment measures."
India's gross domestic product fell 7.5% in July-September, the second quarter of the financial year. The downturn, however, eased from an unprecedented 23.9% contraction during the previous three months, when the nation went under a strict lockdown.
