US GDP Fell By 9.1%, Not 32%, What Is India’s Position

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Why the confusion?

It is because the way the US reports GDP growth/contraction is different from the way India

Year-over-year (YOY) is the comparison of one period with the same period from the previous year.

To annualize a number means to convert a short-term calculation or rate into an annual rate.

Let’s assume during the January to March 2020, the size of the Indian economy or its GDP was Rs.100.
In April to June 2020, this contracted by 10%.
The size of the economy came in at 90 (Rs.100 – 10% of Rs.100).
Now the annualization means the same trend will continue in next 3 quarters.
Thus in July to September 2020, the economy will contract further by 10% to Rs.81
October to December 2020, the economy will contract further by 10% to Rs.72.9
January to March 2021, the economy will contract further by 10% to Rs.65.6
Hence, overall the economy has contracted from 100 to Rs.65.6 or by 34.4%.