India has registered the fifth successive quarterly GDP growth decline and the lowest growth rate in the past six and a half years.
The latest macro data from the CSO shows that India’ s quarterly GDP registered just 5% growth during the first quarter of the current financial year (2019-20). This the lowest figure in six and a half years and the bad news is that the economy continues its downtrend as the previous quarter’s growth rate was 5.8%.
The newly published GDP figures warns strong slowdown tendencies ahead.
As per the new figures, this is the lowest quarterly growth since the first quarter of 2013. It is the poor performance of the manufacturing sector that brought down the GDP growth rate. The manufacturing grown by just 0.6% compared to 12.1 per cent during the first quarter of 2018-19.
An early warning of the incoming poor performance was visible from various sectors. For example, the automobile sector registered its worst performance in 19 years in July with a 31% drop in sales. Automobile sales were on declining trend for the ninth consecutive month.
Slow down to recession
All the different macro data came out over the last one year like the credit growth figures, industrial production index trends, trade figures and employment data indicated that the economy is falling into a recession.
The consolation belief that the negative macro data are just a symptom of a mild slowdown and not about a deep one is gone now. At last, the newly published GDP data verifies the painful slowdown phase ahead.
India no more the fastest growing major economy
The below par performance of the economy indicate that India is not going to be the fastest growing major economy. China’s growth rate was 6.4% for the last quarter and the world’s largest economy is expected to maintain that momentum powered by strong export performance.
The government has launched several corrective measures over the last couple of months. Still, the macro trends on various sectors indicate that the economy is not receptive to the government measures.