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India’s and Brazil’s first-quarter 2021 real GDP data suggested that there will be a strong rebound in both economies following a contraction last year of 4.4 percent in Brazil and 7.1 percent in India, Moody’s Investors Service said
Brazil’s first-quarter GDP expanded 1.2 percent from the previous quarter and 2.3 percent from the first quarter of 2020. India’s first-quarter GDP rose 1.5 percent quarter on quarter.
Therefore, in the first quarter of this year, Brazil’s GDP reached and India’s GDP surpassed their pre-Covid-19 fourth-quarter 2019 levels, said Moody’s in its credit outlook report.
Brazil’s GDP growth beat Moody’s forecast, leading it to upgrade GDP growth forecast to 4.9 percent in 2021 versus 3.3 percent previously.
India’s first-quarter GDP data suggests that the economy was rebounding strongly just before its second Covid-19 wave and renewed restrictions slowed economic activity in March and April.
“We expect India’s real GDP to grow about 9.6 percent in 2021 and 7 percent in 2022.”
Moody’s also said the performance of both countries is uncertain as there is a warning of the third wave given by epidemiologists.
Moody also said that both country’s situation will improve if the Pandemic will be controlled as early as possible.
India’s household and government consumption as well as an 11 percent year-on-year increase in fixed investment drove its first-quarter recovery.
Net exports which rose slower than imports diminished GDP growth. On the supply side, agriculture, manufacturing, and construction led to the recovery.
As in Brazil, India’s mobility and economic activity will likely accelerate in the second half of the year as the pace of vaccinations accelerates. The government’s recently announced strategy to vaccinate 940 million people by December will support economic recovery.
However said Moody, the pace of economic recovery will likely be uneven. Ultimately, the rebound will depend on increased private consumption which can be delayed by weaker household balance sheets as a result of job, income, and wealth losses.