The economy of India has probably shrunk for a second straight quarter, pushing the nation into an unprecedented recession, according to a report by a team of economists that includes Michael Patra, the deputy governor in charge of the Reserve Bank of India’s monetary policy, Bloomberg quoted.

The GDP of India contracted by 8.6% in the quarter ending September, showed the ‘nowcast’, an estimate based on high-frequency data, published by the RBI for the first time. The official data by the government will be published in late November. 

The economy of India in the April-June quarter slumped by nearly 24%. 

“India has entered a technical recession in the first half of 2020-21 for the first time in its history,” the authors wrote, Bloomberg quoted.

The numbers published in the report are buoyed by cost cuts at companies, which boosted their operating profits despite a dip in sales, Bloomberg report said. The report added that the authors also used a range of indicators that include vehicle sales, flush banking liquidity and signal brightening prospects for October.

The Indian economy will return to growth in the October-December quarter, the report said, if this upturn is sustained. This would be earlier than projected by RBI Governor Shaktikanta Das in October where he had pledged to keep monetary policy accommodative.

However, “there is a grave risk of generalization of price pressures, unanchoring of inflation expectations feeding into a loss of credibility in policy interventions,” the economists wrote in the RBI’s bulletin, Bloomberg quoted, adding that they also highlighted the risk to global growth from the second wave of coronavirus.