GDP grew 5.4% in Q3 as construction and manufacturing hit; Economists expect recovery of dent from war, oil price shocks.
GDP grew 5.4% in Q3 as construction and manufacturing hit; Economists expect recovery of dent from war, oil price shocks.
India’s gross domestic product (GDP) is projected to grow at 8.9% in 2021-22 instead of 9.2% previously projected, with year-on-year growth in the October to December 2021 period down from 8.5% in the previous quarter to 5.4% Done. According to the second advance national income estimates released on Monday.
The National Statistical Office (NSO) said the Gross Value Added (GVA) in the economy is expected to grow at 8.3% this fiscal, from a 4.8% contraction in 2020-21. All sectors are expected to exceed pre-pandemic GVA levels this year, except for the contact-intensive segment of services related to trade, hotels, transport, communication and broadcasting.
India’s GDP shrank 6.6% in 2020-21, registering a sharp contraction in the first half of the year before the resumption of growth of 0.7% of GDP in the October-December 2020 quarter.
Economists were overwhelmed by the 5.4% growth recorded in the same quarter of 2021, and expect full-year growth for this year to be higher than the 8.9% projected by the NSO, especially due to the impact of higher oil prices. In light of. Growth as well as inflation trajectory.
“While an unfavorable basis was expected to flatten out growth in the third quarter (Q3, 2021-22), NSO’s initial estimates are well below our expectations, surprising despite modest growth in manufacturing and contraction in manufacturing. Heavy rainfall in southern states,” said ICRA chief economist Aditi Nair
Bank of Baroda Chief Economist Madan Sabnavis also marked the modest growth of 0.2% in the manufacturing sector in the third quarter as a ‘disappointment’, especially as corporates have established healthy growth in profits. “This means that the unorganized sector and small and medium enterprises have still not picked up,” he said, expressing concern about the falling share of domestic consumption.
“To achieve 8.9% growth, GDP has to grow 4.8% in the fourth quarter, given the considerable restrictions imposed by the third wave of the pandemic, ongoing geopolitical tensions and persistent supply challenges in sectors such as coal, power and semiconductors. Looking at it is challenging. M. Govinda Rao, Chief Economic Adviser, Brickwork Ratings, said higher crude oil prices may force a rethink on these GDP estimates for the year.
The GDP growth rates for the first and second quarters of 2021-22 were revised upwards by the NSO from 20.1% to 20.3% and from 8.4% to 8.5%, respectively.
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