Growth likely slowed down in the first quarter of the calendar year 2022 because of the hit to activity from the Omicron variant-led third COVID-19 wave and the Russia-Ukraine war
India’s GDP is estimated to have grown by 8.7 percent in FY22 after growth slid to 4.1 percent in January-March quarter (Q4FY22), data released on May 31 by the Ministry of Statistics and Programme Implementation showed.
Growth likely slowed down in the first quarter of the calendar year 2022 because of the hit to activity from the Omicron variant-led third COVID-19 wave and the Russia-Ukraine war.
The high growth figure is largely due to a favourable base effect, with the economy having contracted by 6.6 percent in FY21 because of the Coronavirus pandemic and intermittent lockdowns, which restricted economic activity.
If the GDP for FY22 is compared to that of FY20 – before the pandemic hit the economy – the growth rate is a mere 1.5 percent.
The statistics ministry’s latest growth estimate for FY22 is 20 basis points lower than its second advance estimate of 8.9 percent, announced in February.
Nominal GDP growth in FY22 was 19.5 percent.
At 8.7 percent, India’s real growth for FY22 is the highest in at least 17 years for which comparable data is available. However, at 4.1 percent, the growth for January-March is the lowest in four quarters.
The last time India’s quarterly growth was lower than 4.1 percent was in January-March 2021, when it had come in at 2.5 percent as the economy continued its emergence from a technical recession following the imposition of a nationwide lockdown in late March 2020.
A country is in a technical recession when its GDP contracts on a year-on-year basis for two consecutive quarters.
FY22 saw the manufacturing sector make a robust return, expanding 9.9 percent. However, as per the latest data for January-March, the sector contracted by 0.2 percent year-on-year, likely reflecting the hit to activity from the third wave and the fallout of the Russia-Ukraine war.
The agriculture sector, meanwhile, continued its steady growth, posting an expansion of 3.0 percent in FY22 and 4.1 percent in the last quarter.
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