India’s GDP statistics for the last year shows steep fall in the fourth quarter from January to March 2017. Growth registered an unprecedented slow down to 6.1% during the quarter and thus bringing down overall performance of the year to 7.1% compared to 8% in the previous year.
The fall in quarterly growth is attributed to the demonetisation induced negative feedback effects. Statistics about the third quarter that was published earlier has not revealed the same declining trend.
According to the Central Statistical Office’s Provisional GDP estimate, the construction sector witnessed contraction during the fourth quarter. The sector registered a contraction of -3.7% compared to 3.4% growth in the previous quarter.
Public expenditure registered a healthy growth of 17% whereas mining registered a momentum. Several estimates predicted slowdown in GDP growth and the current mark of 7.1% shows only a mild shedding in GDP rather than expected.
The new GDP data has thus finalized the demonetization’s effect on growth performance. As the previous year growth rate was 8%, the slowdown to 7.1% partially explains the cost of demonetisation.