The fifth largest economy in the world is set to contract for the second consecutive quarter, dragging the country into an unprecedented recession, according to a forecast by the Indian national central bank.

Gross domestic product (GDP) shrunk 8.6 per cent in the quarter ending in September, the Reserve Bank of India said after reviewing high-frequency data to gauge economic activity.

India’s economy tanked 23.9 per cent between April and June, the worst-ever quarterly decline, after the coronavirus lockdown brought economic activity to a halt and rendered millions of people jobless. India’s financial year runs from April to March.

“India is likely to have entered a technical recession in the first half of 2020-21 for the first time in its history, with two successive quarters of GDP contraction,” the RBI said in a bulletin posted on its website late on Wednesday.

However, the forecast, based on an Economic Activity Index for India from 27 monthly indicators, pointed out that the economy was making a quick recovery.

“The index suggests that the economy rebounded sharply from May/June 2020 with the reopening of the economy, with industry normalizing faster than contact-intensive service sectors, pointing to a short-lived contraction,” it said.

The government will publish second quarter GDP data on November 27.

Finance Minister Nirmala Sitharaman has prepared an economic stimulus package, with a focus on job creation, domestic media reported.

India has the world’s second-largest caseload after the United States, with more than 8.6 million coronavirus cases registered so far. On Thursday, it reported 47,905 fresh cases and 550 deaths within 24 hours./DPA

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