The Indian economy registered an impressive growth rate of 8.4 per cent in the second quarter of FY22. The gradual re-opening of the economy and an increased pace of vaccination supported the revival of economic activities. The performance of high-frequency indicators during the second quarter was also pointing towards the fact that the economy was slowly heading back to the pre-Covid levels.
Consumption demand is considered to be the backbone of the Indian economy, accounting for more than 50 per cent of the total GDP (gross domestic product). In Q2FY22, consumption demand, as measured by private final consumption expenditure (PFCE), registered a growth rate of 8.64 per cent YoY, compared with a contraction of 11 per cent in Q2FY21. On a sequential basis also, consumption demand registered a growth rate of 11.4 per cent in Q2FY22 against a contraction of 15 per cent in the previous quarter. Imports of goods and services registered a growth rate of 40 per cent in Q2FY22.