High oil prices, higher base led to lower growth rate: Finance Ministry

By: | Published: December 1, 2018 1:53 AM

The government on Friday attributed the slowdown in India's GDP growth rate during the second quarter of 2018-19 to a higher base effect, higher import bill on account of oil prices and weakening of the rupee.

oil prices, India GDP growth rate, GDP growth, Subhash Chandra GargThe Finance Ministry said in a statement the second quarter saw a reasonable overall GDP growth of 7.1 per cent with first-half of the fiscal seeing a growth rate of 7.6 per cent. (IE)

The government on Friday attributed the slowdown in India’s GDP growth rate during the second quarter of 2018-19 to a higher base effect, higher import bill on account of oil prices and weakening of the rupee. It said that the economy is on track to maintain a high growth rate in the the current global environment.

The remarks came after the official data released on Friday showed that the pace of India’s Gross Domestic Product (GDP) growth slowed during the second quarter of 2018-19 to 7.1 per cent from 8.2 per cent in the first quarter. The Finance Ministry said in a statement the second quarter saw a reasonable overall GDP growth of 7.1 per cent with first-half of the fiscal seeing a growth rate of 7.6 per cent.

Also read: Big fall in GDP growth from 8.2% to 7.1%: ‘Future does not look rosy’; here’s what really went wrong

“The growth in the second quarter is on higher base compared to the growth of the first quarter,” the statement said. India’s GDP growth rate was 6.3 per cent in second quarter of the previous fiscal while it was 5.6 per cent in the first quarter.

“This quarter also faced the challenge of higher oil prices resulting in much higher import bill and the weakening of rupee. The Indian economy is on track to maintain a high growth rate in the current global environment,” the Ministry said.

Earlier, Economic Affairs Secretary Subhash Chandra Garg said the GDP growth at 7.1 per cent “seems disappointing”. He said while manufacturing and agriculture growth was steady, construction and mining reflected deceleration due to the monsoon. However, he said the half-year growth at 7.4 per cent was “quite robust and healthy”.

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