India's gross domestic product (GDP) grew 3.1 per cent, year-on-year (y-o-y) in the last quarter of the financial year 2019-20 (FY20), the lowest in the past 44 quarters. This dwindling growth since March last year still has some bright spots visible when viewed sequentially.
The country's output in the final quarter of FY20 grew at its best through the fiscal, at 4.4 per cent, quarter-on-quarter (q-o-q). GDP grew 1.6 per cent and 1.4 per cent, sequentially in the last two quarters, while it contracted by 4.2 per cent in the June quarter.
The economy had begun to regain momentum with improving signs of an uptick in consumption and investment towards the end of the third quarter. Fledgling improvements were visible in the eight-core industry growth that improved from 2.7 per cent in December 2019 to 3.4 per cent in March 2020, on a q-o-q basis, while industry output (IIP) grew at 1.7 per cent and nearly 1 per cent in the past two quarters, sequentially. Merchandise exports rebounded with positive growth of 3 per cent in February after 6 months of y-o-y decline.
Going by the same yardstick, gross fixed capital formation, a proxy for investment demand in the country, expanded 2.1 per cent in Q4 of FY20 against 3.5 growth in the December quarter.
But hope withers with each day given the capricious nature of the coronavirus pandemic and the disruption caused by the imposition of lockdown as the output growth is expected to fall off a cliff.
The current GDP numbers accorded well with the expectations of many economists and experts and gave a glimpse into the deleterious impact of coronavirus lockdown on the economy after the last fiscal closed with a week-long period of economic inactivity.