India’s GDP growth falls to 4.5%, lowest in 6 yrs

SILVER LINING? Growth has bottomed out, says govt, next quarter to see a pick-up

NEWDELHI: India’s economy grew 4.5% in the July-september quarter (the second quarter of fiscal 2019-20), the slowest pace of expansion since March 2013, hurt by inadequate revival in consumption and stagnant investment, with only strong government spending preventing an even steeper slowdown.

The latest numbers mark the longest continuous deceleration in gross domestic product (GDP) growth, which has been slowing for six straight quarters. Top officials of the finance ministry said the worst was over and the economy will grow faster in the last two quarters of the current financial year, although highfrequency indicators and anecdotal accounts are yet to reflect this.

The index of eight core sector industries contracted by 5.8% on a year-on-year basis in October. This is the second consecutive monthly contraction after September, when the index shrank 5.1%. Crop destruction due to excess rains in the past month might adversely affect agricultural growth in the third quarter.

Friday’s numbers put India’s GDP growth in the first half of the current fiscal year at 4.8%, the lowest since the new GDP series was launched in 2012-13.

Addressing reporters immediately after announcement of the GDP numbers, Department of Economic Affairs (DEA) secretary Atanu Chakraborty and chief economic adviser (CEA)

KV Subramanian said the country’s economic fundamentals were strong, and that consumption and investment were expected to pick up in the subsequent quarters.