GDP nos 'surprising', but economists say there is an explanation
- Author: Zachary Reyes Mar 01, 2017,
Mar 01, 2017, 13:05
The Commerce Department says that the gross domestic product, the broadest measure of economic health, increased at an annual rate of 1.9 percent in the October-December quarter.
India's economy unexpectedly grew 7% in the October-December quarter of 2016, indicating that the impact of the shock ban on high-value banknotes in November wasn't as adverse as initially feared. The growth during the preceding quarter was 7.4 percent.
Finance ministry said the 7 per cent growth in the third quarter has negated the negative projections and speculations about the impact of demonetisation on growth. Economists polled by Reuters had expected fourth-quarter GDP would be revised up to 2.1%. The opposition parties had attacked the Centre's move saying that it would significantly impact the GDP growth.
"Advance GDP growth estimate for current fiscal pegged at 7.1 per cent, the same as projected earlier", it added.
"In fact, the GDP figures for the January-March quarter will probably reflect the disruption caused by demonetisation more accurately", Pronab Sen told News18.
Agriculture growth was measured at 6 per cent compared with -2.2 a year ago and industries growth was measured at 6.6 percent compared with 4.6 per cent. They are, however, broadly in line with an economy that has, through ups and downs, settled at a roughly 2% growth pace since the recession ended.
The "agriculture, forestry and fishing" sector is likely to show 4.4 per cent growth in its GVA during 2016-17, as against the previous year's growth of 0.8 per cent.
Although both Dussehra and Diwali fell in the December quarter, the 10.1% growth reported by CSO in the private consumption expenditure looked puzzling to most analysts (but some said use of old notes for consumption might have contributed to the rise).
The data further revealed that Gross Fixed Capital Formation (GFCF) at current prices is estimated at Rs 40.97 lakh crore in 2016-17 as against Rs 39.89 lakh crore in last fiscl.
In an interview to CNBC, P Chidambaram said: "The GDP numbers have come as a bit of a surprise".
The unrevised GDP growth in the fourth quarter is notably slower than the 3.5 percent jump seen in the third quarter. According to International Monetary Fund, the growth of Indian economy will jump to 7.2 per cent in 2017-18.
"Seeking progress while maintaining stability" will be the main theme for China, according to a statement issued after the Central Economic Work Conference, during which Chinese leaders and senior officials gathered to map out priorities for 2017.