GDP expands at 7.1% in FY17, but slows to 6.1% in Q4 as demonetisation bites

GDP expands at 7.1% in FY17, but slows to 6.1% in Q4 as demonetisation bites

GDP expands at 7.1% in FY17, but slows to 6.1% in Q4 as demonetisation bites

The Indian economy grew 7.1% in 2016-17, the government said on Wednesday in new estimates, identical to the expected expansion in February but slower than the 8% growth of the previous year.

A growth of 6.1 percent in January-March, however, revealed that the economy continues to suffer from shock demonetization which resulted in a sharp decline in high-value bills and limited access to spend cash and to Business investment.

Private final consumption expenditure (CCTB), a measure to measure household expenditure, fell by 58.7% of GDP (at current prices), from January to March 2017, from 61.6% of the quarter And 59.1% in the fourth quarter of 2015-16.

Gross Fixed Capital Formation (GFCF), a guide to measuring investment activity, also declined to 25.5% of GDP (at current prices) from January to March 2017, down from 27% in the previous quarter and 28 5% in the fourth quarter of the previous year.

Head of Statistics TCA Anant India, however, warned against over-reading the impact of the demonetization of GDP data.

“The impact of policies such as the demonetization of GDP data can be described as post-hoc analysis,” Anant said. “The evaluation of the impact of the policy is a complex analysis of econometrics. This is not a simple argument before and after.”

The new gross domestic product (GDP) calculates the factors in plant data and inflation in wholesale prices (MPI), which have lower prices and stronger manufacturing activity compared to Previous estimates.

Earlier this month, the government issued a new set of industrial production index (IIP) and the IPM that changed the base year from 2011 to 2012, from 2004 to 2005. It also added new product categories and changed its weight to bring the Two indices of current consumption trends.

According to the released GDP data Wednesday, using consolidated IIP, gross value added (GVA) in manufacturing increased by 7.9 percent in 2016-17, up from 7.7 percent in the old series, but Slower than the 10.8 percent from the previous year.

IPM inflation is used to achieve real growth series from the nominal data. The new IPM series is still lower than the old series, which shows small deflation index values. According to the new series, WPI increased by 1.7% in 2016-17 compared to 3.7% in the previous series.

GVA VS GDP

The Central Bureau of Statistics (CSO) said the slower growth for GVA – 6.6 percent in 2016-17 – suggesting that the expansion is slower than what GDP prime numbers suggest.

GVA, which is GDP minus tax, serves as a more realistic proxy for measuring changes in the total value of goods and services produced in the economy.

In the second preliminary estimates published in February, the CSO had estimated that GVA growth, which is GDP minus net taxes, will slow to 6.7% in 2016-17. Wednesday, preliminary estimates have shown that GVA increased by 6.6% in 2016-17, or 1.3 percentage points slower than the 7.9% of the previous year.

The effect of the return of the currency in November 2016 and the resulting slowdown in consumption and investment could be hidden in the estimates of slower growth in GVA and GDP.

Higher indirect tax revenues in 2016-17 may also partly explain GDP growth forecast The Indian economy grew 7.1% in 2016-17, the government said on Wednesday in new estimates, similar to the expected expansion in February but slower than The 8% growth of the previous year.

A growth of 6.1 percent in January-March, however, revealed that the economy continues to suffer from shock demonetization which resulted in a sharp decline in high-value bills and limited access to cash and business investment.

Private final consumption expenditure (CCTB), a measure to measure household expenditure, fell by 58.7% of GDP (at current prices), from January to March 2017, from 61.6% of the quarter and 59.1% in the fourth quarter of 2015-16 .

Gross Fixed Capital Formation (GFCF), a guide to measuring investment activity, also declined to 25.5% of GDP (at current prices) from January to March 2017, down from 27% in the previous quarter and 28 5% in the fourth quarter of The previous year.

Head of Statistics TCA Anant India, however, warned against over-reading the impact of the demonetization of GDP data.

“The impact of policies such as the demonetization of GDP can be described as post-hoc analysis,” Anant said. “The evaluation of the impact of the policy is a complex analysis of econometrics. This is not a simple argument before and after.”

The new gross domestic product (GDP) calculates the factors in plant data and inflation in wholesale

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