India’s GDP growth slips to 11-year low of 3.1 percent in March quarter
New Delhi, May 29 (efe-epa).- India’s economy grew by 3.1 percent in the January-March quarter compared to the same period a year ago, according to official data released on Friday, offering the first reading of the impact from the new coronavirus and subsequent nationwide lockdown.
As per the provisional estimates by the National Statistical Office, the growth in the gross domestic product for financial year 2019-20 is estimated to be around 4.2 percent as compared to 6.1 percent in 2018-19.
The growth rate for the entire financial year that ended on Mar. 31 is the lowest in 11 years for Asia’s third-largest economy.
However, the quarterly growth rate, which is also the slowest since the January-March period of 2009, doesn’t reflect the full impact of the over two months of COVID-19-induced shutdown that Prime Minister Narendra Modi imposed on Mar.25.
The NSO said in a statement that the economy had been affected by the global coronavirus pandemic and consequent nationwide lockdown measures.
“As some of these units are yet to resume operations and because the statutory timelines for submitting the requisite financial returns have been extended by the government, these estimates are based on the available data. Consequently, the estimates are likely to undergo revision,” it said.
Economists are of the view that the real impact of the coronavirus lockdown and what lies ahead for the economy would be known in the first-quarter of the current financial year, that ends on Jun. 30.
As per the NSO, the services sector – that account for 55 percent of India’s GDP – was the worst hit as tourism, aviation and hospitality received a crushing blow.
The organization also revised the growth rates for the previous quarters of the last financial year, extending a sequential deceleration to the eighth consecutive quarter.
As such, the GDP growth rate for the quarter ending Dec. 31, 2019 was revised to 4.1 percent from the 4.7 percent estimated earlier.
Similarly, for July-September 2019, the growth rate was revised to 4.4 percent from 5.1 percent, and for April-June, it was amended to 5.2 percent from the 5.6 percent calculated earlier.
The US-based Goldman Sachs Group has estimated that India’s economy could contract by a record five percent in the current fiscal year.
It was clear that the economy had already been slowing down as the Reserve Bank of India had in December last year revised the country’s economic growth rate forecast for the 2019-20 fiscal year to 5 percent, down from 8 percent and 6.1 percent projected earlier.
The government had in the first advance estimates, released in January for budget preparations, also pegged the economic growth rate at 5 percent for 2019-20. The projection was reiterated in the second advance estimates released on Feb. 28. EFE-EPA