“Growth will be higher than the pre-Covid level. The predictions in the Economic Survey and the budget should be achieved, based on trends from the first quarter. The budget estimate should be correct. The level (of economic activity) should be back next year, but we need to analyse the data,” the government’s chief economist told reporters.
The Economic Survey had projected 11% GDP growth during the year, while the budget estimated it at 10.5%.
Asked if the 20.1% growth estimated during the April-June quarter was on the account of a sharp contraction in the economy last year when a nationwide lockdown had been imposed, Krishnamurthy said: “Of course, there is a base effect. At the same time, this has happened during a much more intense second wave, which was far more intense from a health perspective. There is across the board improvement as seen in a lot of high frequency indicators.”
After the first quarter numbers were released a year ago, Krishnamurthy had suggested that a V-shaped recovery will take place. He underlined that the economic fundamentals remained strong that will help it weather the storm better when global central banks suck out liquidity from the system, amid rising inflation in many countries.