India's economy grows by 8.4% amid signs of recovery

Laborers work at a building construction site in Mumbai, India, Tuesday, Nov. 30, 2021. India’s economy grew by 8.4% in the July-September quarter from the same period a year earlier, the government announced Tuesday, signaling hopes of a growing economic recovery after it suffered historic contractions sparked by the COVID-19 pandemic. (AP Photo/Rafiq Maqbool)

Workers prepare work to lay an underground electricity cable in Mumbai, India Wednesday, Nov. 24, 2021. India’s economy grew by 8.4% in the July-September quarter from the same period a year earlier, the government announced Tuesday, signaling hopes of a growing economic recovery after it suffered historic contractions sparked by the COVID-19 pandemic. (AP Photo/Rafiq Maqbool, File)

Indian laborers work at a flyover construction site in Jammu, India, Tuesday, Nov. 30, 2021. India’s economy grew by 8.4% in the July-September quarter from the same period a year earlier, the government announced Tuesday, raising hopes of a recovery after the country suffered historic contractions sparked by the coronavirus pandemic. (AP Photo/Channi Anand)

An Indian laborer works at a flyover construction site in Jammu, India, Tuesday, Nov. 30, 2021. India’s economy grew by 8.4% in the July-September quarter from the same period a year earlier, the government announced Tuesday, raising hopes of a recovery after the country suffered historic contractions sparked by the coronavirus pandemic. (AP Photo/Channi Anand)

NEW DELHI (AP) — India's economy grew at an 8.4% annual pace in the July-September quarter in the latest sign of an economic recovery in Asia’s third-largest economy, the government reported Tuesday.

India suffered one of the biggest setbacks of any major economy in the last fiscal year.

In the same quarter a year before, the economy contracted by 7.4%, badly hit by rising COVID-19 cases and a stringent nationwide lockdown, with restrictions lasting months that dealt a huge blow to economic activity.

After a devastating surge in virus cases stoked by the delta variant earlier this year, the situation has improved in recent months. Daily cases have sunk to about 10,000 after breaching 400,000 in May. The pace of vaccinations has picked up, instilling confidence in reopening businesses and industries. Streets and markets across the country are now abuzz with activity.

Sectors like agriculture and mining performed well and helped lead the growth seen in the July-September quarter, experts said.

The economy expanded at a 20.1% pace in the April-June quarter, the fastest growth since India began publishing GDP figures in 1996. But economists cautioned that the rise was calculated from 2020's smaller base, when the economy shrank by 24.4% in April-June, pulling the country into a recession.

A country enters a technical recession if its economy contracts for two successive quarters.

In 2020-21, India's growth contracted by 7.3%, worsening from a slowdown that slashed growth to 4% from 8% in the two years before the pandemic hit.