The RBI had predicted an 8% increase in economic growth. Additionally, it had forecast that after the first quarter, the pace would decrease and that overall GDP growth for the fiscal year would be around 6.5%. India would still have a significant performance and would have the fastest-growing large economy.It should be emphasised that the numbers are still improving even if exports are down from the same time last year and imports are up.
The sector that contributed the most to the expansion was the services sector, which experienced a record 10.3% growth. Construction was among the industrial sectors that lagged. Only somewhat better than in previous quarters, manufacturing has fared at 4.7%, which may be a reflection of the decline in exports.
Source: Dainik Bhaskar
The construction industry’s growth, which had accelerated following the epidemic, slowed down but was still 7.9%. The performance of cement and steel, on the other hand, increased by 12.2% and 10.2%, respectively. In contrast to the financial, real estate, and professional services sector, which increased at a 12.2% rate, trade, hotels, transportation, and communication showed strong growth at 9.2%.
Positive indicators included the rise in private consumption and the expansion of investment activities. In contrast to the second half of last year, when private consumption grew by 2.5%, it increased by 6% this year. A robust 8% growth in investment activity was also seen, but it was less than the 8.5% growth seen in the second half of previous year.
Source: The Economic Times
However, maintaining this rise in the upcoming months won’t be possible. The high rate of inflation might reduce demand and household expenditure. The inadequate monsoon and other climatic challenges will undoubtedly have an impact on agriculture. Inflation and a decline in farm incomes may have an impact on rural demand.
The global economic slowdown will also have a negative impact on commerce, which will make it a negative element. The RBI anticipates a slowdown in growth to 6.5% in the second quarter, 6% in the third quarter, and 5.7% in the fourth. However, it’s also feasible that erosion will worsen as expansion continues. Politics will rule the upcoming months, and it is now impossible to forecast how it will affect the economy.
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