India’s already collapsing economy, the quarterly economic growth of the country slowed down to almost 7 years low, in October-December of the 2019-20 financial year. The situation is even more concerning considering the contraction in manufacturing and electricity, and the threat of Coronavirus looming over our heads.
The National Statistical Office (NSO) released data on Friday stating GDP growth up to 4.7% in December quarter, which is slower than the previous quarterly growth of 5.1%. This GDP growth is also recorded as the slowest in the last 27 quarters; the lowest being in the January-March quarter of the 2012-13 period at a rate of 4.3%.
The farm sector witnessed a steady growth of 3.5% in the December quarter, compared to that of the 2% growth recorded in the previous quarter. The manufacturing sector saw a decline of 0.2%, though it had an expansion of 5.2% earlier this year which fell down 0.4% in the previous quarter. The services sector, which amounts up to 60% of the entire economy, also observed a slight growth of 7.4% from 7.3% in the previous quarter.
The revised quarterly data presented by NSO for the 2018-19 and 2019-20 are in, but with reports from other quarters yet to be unveiled, comparisons are not possible at the moment.
NSO also disclosed an estimated GDP growth of 5% in 2019-20, but no impact of Coronavirus on the economy was mentioned, whereas, global economic growth is expected to run into a major drag.
Coronavirus has in one way disrupted global trade with markets and factories shutting down, though India has not yet faced any severe impact due to the COVID-19 virus outbreak if the situation persists for a long period, experts believe it could certainly affect the market.
Considering Indian’s ties with China for importing several materials and for even China’s global supply chain; the new Coronavirus situation can cause a lot of problems in the Indian market as well.
India, as Asia’s largest economy, has been on a slowdown, and the Reserve Bank of India (RBI) measures by aggressively cutting off rates in order to support growth show RBI’s capability of doing more when the time comes.
Finance Minister Nirmala Sitharaman has assured audiences of the COVID-19 virus not affecting the growth, as the Government is closely monitoring its impact and doing everything to support the growth.