GDP contraction in the fourth quarter due to the effects of pandemics, high commodity prices, experts say

GDP contraction in the fourth quarter due to the effects of pandemics, high commodity prices, experts say – Mail Bonus

The contraction seen in India’s four-quarter economic growth to a low of 4.1 percent in January-March period 2021-22 was mainly due to the effects of the third Covid wave and high commodity prices, analysts said. The Indian economy grew at a one-year slow pace in January-March, slumping GDP growth for the full year to March to 8.7 percent before Russia’s invasion of Ukraine added a new inflation barrier to the recovery.

GDP grew by 4.1 percent in the last quarter of the financial year 2021-22, according to information from Statistics Iceland.

This was lower than the 4.8 percent growth that the Chinese economy saw during the quarter.

“Preliminary GDP actual projections for the 2021-22 fiscal year exceed the 2019-20 pandemic limit to bring about a full economic recovery,” said Chief Economic Adviser V Anantha Nageswaran at a news conference.

Aditi Nayar, Chief Economist,

said that the contraction seen in India’s growth to a four-quarter low in January-March period 2021-22 was inevitable, due to the negative impact of the third wave on contact services and high commodity prices on margins, as well. as an unfavorable basic effect.

“It is not surprising that the service sector was the main driver of 3.9 percent economic growth in the fourth quarter of FY2022,” she said.

The increase in government spending, public administration, defense and other services (PADOS) stood out as a rapidly growing sub-sector of GVA (Gross Value Added) in the January-March quarter of the last fiscal year, Nayar added.

Rumki Majumdar, an economist at Deloitte India, said the difference between real and nominal GDP production was indicative of inflation

problem, and the economy has long faced the challenge of rising prices.

“Higher prices offset consumers’ wallets and production costs. The panic and the search for more secure shelters among international investors led to capital outflows from emerging markets, India was one. This led to a devaluation and higher import bills,” Majumdar said.

Ramesh Nair, CEO of India and Medical, Market Development, Asia, Colliers, said that India’s GDP grew by 8.7 percent in the years 2021-2022, and marked a sharp return after a 6.6 percent contraction in the previous fiscal year.

“This clearly indicates that the economy has recovered from the effects of the pandemic and is recovering. Both the demand for housing and offices have a very strong correlation with GDP, even though price fluctuations are dependent on demand and supply,” he said.

DK Srivastava, EY India’s chief policy adviser, said the NSO figures confirm that all GDP shares were higher than their magnitudes for Covid.

“In the future, in the years 2022-23, inflation-based inflation (IPD) could be high compared to the current inflation trend. As the expectation that nominal GDP growth on FY23 will be significantly above real GDP growth, the Center could accumulate significantly higher tax revenues. budget estimate, “Srivastava added.

According to analysts, the outlook for the current financial year remains unclear as global crude oil prices have hardened to $ 120 a barrel following tougher sanctions on Russian oil.

The momentum of the service sector will be one of the key drivers, apart from the government’s emphasis on increasing public investment spending.

High inflation had led the Central Bank to raise the reference rate by 40 basis points in an indefinite review. Similar action is expected when the Monetary Policy Committee convenes for a two-month review on 8 June.

The government’s chief economic adviser, Nageswaran, ruled out the risk of stagnation in India, where the country is better off than other nations.

The moratorium risk for India is relatively low compared to other countries, he said.

Mail Bonus – #GDP #contraction #fourth #quarter #due #effects #pandemics #high #commodity #prices #experts

Leave a Comment

Your email address will not be published.