New Delhi, Feb 29: India’s economy expanded at its slowest pace in more than six years in the last three months of 2019, with analysts predicting further deceleration as the global Covid 19 coronavirus outbreak stifles growth in Asia’s third-largest economy.
The gross domestic product (GDP) data released yesterday showed government spending, private investment and exports slowing down, while there is a slight upturn in consumer spending and improvement in rural demand lent support.
The quarterly figure of 4.7% growth matched the consensus in a Reuters poll of analysts but was below a revised - and greatly increased - 5.1% rate for the previous quarter.
The central bank has warned that downside risks to global growth have increased as a result of the coronavirus epidemic, the full effects of which are still unfolding.
Prime minister Narendra Modi’s government has taken several steps to bolster economic growth, including a privatisation push and increased state spending, after cutting corporate tax rates last September.
In its annual budget presented this month, the government estimated that annual economic growth in the financial year to March 31 would be 5%, its lowest for last 11 years.
Modi’s government is targeting a slight recovery in growth to 6% for 2020/21, still far below the level needed to generate jobs for millions of young Indians entering the labour market each month.
The annual GDP figure for the September quarter was ramped up from an earlier estimate of 4.5%, while the April-June reading was similarly lifted to 5.6% from 5%, data released by the Ministry of Statistics showed on Friday.
Capital Investment Drop
In the December quarter, private investment grew 5.9%, up from 5.6% in the previous quarter, while government spending rose by 11.8%, against 13.2% in the previous three months.
However, corporate capital investment contracted by 5.2% after a 4.1% decline in the previous quarter, indicating that interest rate cuts by the central bank have failed to encourage new investment. Manufacturing, meanwhile, contracted by 0.2%.
“It appears growth slowdown is not just cyclical but more entrenched with consumption secularly joining the slowdown bandwagon even as the investment story continues to languish,” said Madhavi Arora of Edelweiss Securities in Mumbai.
Many economists said that the government stimulus could take four to six quarters of time before lifting the economy and the impact of those efforts could be outweighed by the global fallout from the coronavirus epidemic that began in China.
“The coronavirus remains the critical risk as India depends on China for both demand and supply of inputs,” said Abheek Barua, chief economist at HDFC Bank.
Indian shares sank on Friday for a sixth session running, capping their worst week in more than a decade. The NSE Nifty 50 index shed 7.3% over the week, while the Sensex dropped 6.8%, the worst weekly declines since the 2008-09 financial crisis.
Separately, India’s infrastructure output rose 2.2% year on year in January, data showed on Friday.
A spike in inflation to a more than 5-1/2 year high of 7.59% in January is expected to make the RBI hold off from further cuts to interest rates for now, while keeping its monetary stance accommodative.
Comments
She should be keep name as Modi since birth date is fake, sure that kid will be another Modi by FAKINGS.
Its unfortunate that this lady has misguided all indians just to get popularity. May be she thought that Modi will be happy with her and give her 15 laks promised by him 5 years back. She should know that Modi said it only to fool us and there is no reality in it. It was a jumla baazi only and soon he may promise again to transfer 25 lcas to every indian citizen. My sincere advice to this lady is to trust in Allah only and always tell truth. By providing false information to get popularity will not help us. May Allah bless us with right way of thinking.
She should have named after EVM like - EVM ka Kamal Khan!!!
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