India’s economic growth has slowed down to 6.6% for the third quarter ended December 2018 as against 7.2% in the corresponding period of the previous year. The Gross Domestic Product (GDP) growth for the third quarter also fell short of various estimates put forth by analysts. A poll by Reuters had anticipated that India’s GDP growth is likely to be around 6.9% in the third quarter.
In the previous quarter ended September 2018, the Central Statistics Office (CSO) lowered the country’s economic growth projection from 7.1% to 7.0% for the full fiscal year. During the fiscal year 2017-18, India witnessed a GDP growth of 7.2%. This slowdown in economic growth has been attributed to the slump witnessed in the farming and manufacturing sectors in the country.
Due to this lower than expected growth in third-quarter GDP, analysts now expect that the fourth quarter growth will be just around 6.1% to 6.4%. However, recovery is expected from the first quarter of the next fiscal year. Despite the slowdown, India still holds the position as the world’s fastest-growing large economy. During this quarter, China’s GDP growth was around 6.4%.
Among the major factors that affected growth, private consumption declined from 9.8% in the second quarter to 8.4% in the third quarter. Gross value growth for the third quarter was 6.3% compared to 6.8% in the previous quarter. However, financial services witnessed a decent growth with 7.3% for the three-month period ended December 2018.
Per capita income during this fiscal year is expected to grow 5.8% as against the growth of 5.7% in the previous fiscal year. The CSO also stated that real GDP for the fiscal year 2018-19 is expected to reach Rs.141 lakh crore compared to the 2017-18 value of Rs.131.80 lakh crore. Some of the measures like the support scheme for farmers is likely to boost private consumption in the future, and this will have a favourable impact on the economy.
Source: Financial Express