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Mixed growth signals
News:
- The fourth quarter of the financial year 2017-18 grew at 7.7%. It is the fastest and strongest growth in the entire FY 2017-18.
Important facts:
- The growth in economy is driven by growth in capital formation, manufacturing and construction sector.
- The manufacturing sector has contributed to approx 20% of quarterly GVA (gross value added) and the construction sector contributed to 8%.
- The Manufacturing sector grew at 9.1% (4th quarter) and 5.7% for the entire FY18 and the Construction sector grew at 11.5% (4thquarter) and 5.7% for the entire FY18.
- Two key group of services that contributed to 38% of fourth-quarter GVA are as follows:
- First group: trade, hotels, transport, communication and broadcasting
- Second group: financial, real estate and professional services
- The growth in construction sector will create more direct and indirect jobs and will serve as multiplier of overall output.
- Agriculture, forestry and fishing sector has maintained its growth over the four quarters of the FY.
- Gross fixed capital contributed the most in percentage terms (32.2%).
- However, the contribution of private final consumption expenditure and government spending is weak.
- The economy may be further be affected by external risks such as rise in crude price and input costs. RBI may also raise interest rate.
