Sectors hit hardest by pandemic grew slower
India''s gross domestic product (GDP) data indicated that while domestic demand improved in the June quarter, growth was much slower in the sectors hardest hit by the pandemic, signalling deeper scarring and lower trend growth, research firm Nomura said in a report.Manufacturing, construction and trade, and hotels, transport and communication - showed disappointing GDP momentum in the June quarter.While domestic demand momentum did improve sequentially in the April-June period, the slow recovery in the pandemic-hit sectors suggests lower post-pandemic trend growth, Sonal Varma, chief economist (India and Asia ex-Japan) Nomura, said. "Despite reopening benefiting the contact intensive services sectors, the underwhelming performance of the most vulnerable segments suggests potentially deeper scarring," Varma said. Outside of agriculture, these three sectors employ more unorganised sector workers, she highlighted. "Their slower rebound, despite reopening, suggests firms have either shutdown or are no longer contributing to production, whereas larger firms have thrived and gained market shares.
Sectors hit hardest by pandemic grew slower
India''s gross domestic product (GDP) data indicated that while domestic demand improved in the June quarter, growth was much slower in the sectors hardest hit by the pandemic, signalling deeper scarring and lower trend growth, research firm Nomura said in a report.Manufacturing, construction and trade, and hotels, transport and communication - showed disappointing GDP momentum in the June quarter.While domestic demand momentum did improve sequentially in the April-June period, the slow recovery in the pandemic-hit sectors suggests lower post-pandemic trend growth, Sonal Varma, chief economist (India and Asia ex-Japan) Nomura, said. "Despite reopening benefiting the contact intensive services sectors, the underwhelming performance of the most vulnerable segments suggests potentially deeper scarring," Varma said. Outside of agriculture, these three sectors employ more unorganised sector workers, she highlighted. "Their slower rebound, despite reopening, suggests firms have either shutdown or are no longer contributing to production, whereas larger firms have thrived and gained market shares.