ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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The Faltering Economy

With growth faltering and investment lagging, the economy is skidding.

The provisional estimates of gross domestic product (GDP) for 2012-13, together with those of the last quarter of the same, released by the Central Statistics Office on 31 May, have not brought any surprises for the advance estimates, released earlier in February, had hinted at what was to come. GDP at 2004-05 prices has decelerated sharply from 9.5% in 2010-11 (second revised estimate (RE)) to 6.2% in 2011-12 (first RE), and from this to 5.0% in 2012-13, the fourth quarter figure of which is 4.8%. Going by economic activity, the growth figures for agriculture, forestry and fishing, taken together, chronologically, for the years just mentioned are 7.7%, 3.6% and 1.9%, for the manufacturing sector 11.4%, 2.7% and 1.0%, and for the services sector, relatively the least affected, 9.8%, 8.2% and 7.1%.

Looked at from the expenditure side, the growth of gross fixed capital formation (again, all figures at 2004-05 prices) has plunged, from 15.0% in 2010-11 to 4.4% in 2011-12, and from this to 1.7% in 2012-13, accompanied by a sharp rise in the trade deficit on goods and services, and a sharp fall in the growth of private final consumption expenditure in the last two years, from 8.0% in 2011-12 to 4.0% in 2012-13.

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