Among the BRICS and G7 countries, India is likely to have recorded the fastest rate of quarterly growth in the October-December quarter.
Finance Minister Nirmala Sitharaman’s efforts to revive the economy have started to appear on the ground, helping to regain the lost momentum of the GDP. “A series of government stimulus measures, coupled with a low-interest-rate environment, are likely to spur demand and investment in 2020 and to produce a rebound in full-year real GDP growth, to 6.1% (up from an estimated 4.9% in 2019),” said a report by the Economist Intelligence Unit. Surprisingly, among the BRICS and G7 countries, India is likely to have recorded the fastest rate of quarterly growth in the October-December quarter. India is expected to retain the top spot in the January-March quarter as well.
Over the December-ending quarter, India’s real GDP growth has been estimated to have grown by 1.6 per cent on-quarter and is estimated to grow further at 1.9 per cent in the current quarter. However, it is also said that the strong headline figure was artificially boosted by the dismal performance of the Indian economy in the previous quarter amid weak consumer sentiment and tepid investment.
Due to sluggish global growth in 2019, the EUI report also estimates that the previous quarter economic performance was weak across the G7 and BRICS countries. The slow global growth has been attributed to the combined effect of global trade tensions, a sharp deceleration in real GDP growth in the US, China and India, renewed volatility in emerging markets, and political uncertainty in a number of European countries.
Meanwhile, India’s year-long slowdown may not continue for long as early indicators suggest a recovery in the growth. 11 of the 16 non-financial indicators such as the output of passenger vehicles, commercial vehicles, motorcycles, CIL and refinery output, hydroelectricity generation, non-oil merchandise exports, and rail freight traffic recorded an improved on-year performance in Q3 FY2020, compared to the previous quarter. Credit Rating agency ICRA has also anticipated a pickup in the real GVA and GDP growth.