Economic slowdown fallout: GDP growth estimated to drop to 5% in FY20 on deceleration in manufacturing sector

The country’s economy is estimated to grow at 5 percent in 2019-20 as against 6.8 percent in the previous fiscal, according to government data. The decline has been mainly on account of deceleration in manufacturing sector growth, which is expected to come down to 2 percent in 2019-20 from 6.2 percent in the year-ago fiscal, as per the first advanced estimates of the national income released by National Statistical Office (NSO) on Tuesday.

#BreakingNews | CSO sees FY20 GDP growth at 5% Vs 6.8% (YoY) pic.twitter.com/QV7IBryOeU

— CNBC-TV18 (@CNBCTV18Live) January 7, 2020

The deceleration was also witnessed in sectors like agriculture, construction and electricity, gas and water supply. Whereas, some sector, including mining, public administration, and defence, showed minor improvement.

FY20 Advance GDP Estimates | The first advance estimate of FY20 GDP growth at 5%; gross fixed capital formation estimated at 1% against 10% on a yearly basis pic.twitter.com/4qLn3mLzcj

— CNBC-TV18 (@CNBCTV18Live) January 7, 2020

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The gross domestic product (GDP) had expanded by 7.2 percent in 2017-18 and 8.2 percent in 2016-17. “Real GVA (Gross Value Added) is anticipated to grow at 4.9 percent in the current fiscal as against 6.6 percent in 2018-19,” it said. According to the CSO estimates, the per capita net national income during 2019-20 will be Rs 1,35,050, showing a rise of 6.8 percent as compared to Rs 1,26,406 during 2018-19 with the growth rate of 10 percent.

Gross Fixed Capital Formation (GFCF), a barometer of investment, at current prices is estimated at Rs 57.42 lakh crore in 2019-20 as against Rs 55.70 lakh crore in 2018-19. At Constant (2011-12) Prices, the GFCF is estimated at Rs 45.93 lakh crore in 2019-20 as against Rs 45.48 lakh crore in 2018-19. In terms of GDP, the rates of the GFCF at Current and Constant (2011-12) prices during 2019-20 are estimated at 28.1 percent and 31.1 percent, respectively, as against the corresponding rates of 29.3 percent and 32.3 percent, respectively in 2018-19. (With PTI inputs)