AGL 5.60 Decreased By ▼ -0.18 (-3.11%)
ANL 8.86 Decreased By ▼ -0.02 (-0.23%)
AVN 76.50 Decreased By ▼ -2.42 (-3.07%)
BOP 5.24 Decreased By ▼ -0.04 (-0.76%)
CNERGY 4.61 Decreased By ▼ -0.09 (-1.91%)
EFERT 81.15 Decreased By ▼ -0.45 (-0.55%)
EPCL 50.31 Decreased By ▼ -0.60 (-1.18%)
FCCL 13.15 Decreased By ▼ -0.23 (-1.72%)
FFL 5.65 Decreased By ▼ -0.07 (-1.22%)
FLYNG 7.06 Decreased By ▼ -0.09 (-1.26%)
FNEL 4.84 Increased By ▲ 0.02 (0.41%)
GGGL 8.80 Decreased By ▼ -0.10 (-1.12%)
GGL 14.58 Decreased By ▼ -1.30 (-8.19%)
HUMNL 5.73 Decreased By ▼ -0.04 (-0.69%)
KEL 2.63 Decreased By ▼ -0.03 (-1.13%)
LOTCHEM 28.90 Decreased By ▼ -0.15 (-0.52%)
MLCF 24.50 Decreased By ▼ -0.60 (-2.39%)
OGDC 71.90 Decreased By ▼ -0.55 (-0.76%)
PAEL 15.07 Decreased By ▼ -0.28 (-1.82%)
PIBTL 4.97 Decreased By ▼ -0.08 (-1.58%)
PRL 16.09 Decreased By ▼ -0.20 (-1.23%)
SILK 1.08 Decreased By ▼ -0.01 (-0.92%)
TELE 9.24 Decreased By ▼ -0.13 (-1.39%)
TPL 7.21 Decreased By ▼ -0.12 (-1.64%)
TPLP 18.58 Decreased By ▼ -0.37 (-1.95%)
TREET 21.60 Decreased By ▼ -0.40 (-1.82%)
TRG 133.75 Decreased By ▼ -7.40 (-5.24%)
UNITY 16.70 Decreased By ▼ -0.32 (-1.88%)
WAVES 9.79 Decreased By ▼ -0.11 (-1.11%)
WTL 1.40 Decreased By ▼ -0.01 (-0.71%)
BR100 4,209 Decreased By -45.8 (-1.08%)
BR30 15,399 Decreased By -333.7 (-2.12%)
KSE100 42,070 Decreased By -323.2 (-0.76%)
KSE30 15,535 Decreased By -129.4 (-0.83%)
Follow us

NEW DELHI: India's economy lost momentum in the final quarter of 2021, with growth slowing from previous two quarters, data showed on Monday, as fears mount that soaring costs in the wake of Russia's invasion of Ukraine will further sap growth.

Gross domestic product rose 5.4% year-on-year in October-December, official data showed, less than 6% forecast by economists in a Reuters poll, and below upwardly revised 8.5% growth in July-September and 20.3% April-June expansion.

"The growth number is really disappointing," said Sujan Hajra, chief economist at Mumbai-based Anand Rathi Securities, citing weakening rural consumer demand and investments.

India, which covers nearly 80% of its oil needs through imports, possibly faces a widening trade deficit, a weaker rupee and higher inflation after crude prices spiked above $100 a barrel, with a hit to growth seen as the main concern.

"Given the geopolitical instability and crude oil prices, we think the fiscal and monetary policy accommodation will continue," Hajra said.

A 10% rise in oil prices could shave 0.2 percentage points off India's GDP growth while adding 0.3 to 0.4 percentage points to retail inflation, according to Nomura's estimates.

Oil soars past $102 as sanctions and pressures on Russia mount

The Reserve Bank of India slashed its key repo rate by 115 basis points since March 2020 to soften the blow from the coronavirus pandemic and has kept rates low to support the economic recovery.

Weakening demand

However, that recovery, already sputtering amid weak consumer demand and private investment, slowed further when the third wave of coronavirus infections hit Asia's third-largest economy last month.

Growth in consumer spending, its main driver, slowed to 7.0% from a year earlier in October-December quarter from revised 10.2% in previous quarter, Monday's data showed.

Manufacturing slowed to 0.2% growth from revised expansion 5.6% expansion in the previous quarter while the construction sector contracted 2.8% after 8.2% growth in the previous quarter.

The government also cut its growth estimate for the 2021/22 fiscal year ending on March 31 to 8.9% from 9.2% seen in January as COVID-19 related curbs weighed on activity early this year.

Investment growth slowed to just 2.0% on year compared with revised 14.6% increase in the previous quarter, with state spending slowing to 3.4% growth after a 9.3% rise in July-September.

Sakshi Gupta, senior economist at HDFC Bank, said India was likely to feel the ripple effects of widening sanctions against Russia.

"We see a downside risk of 20-30 basis points to our base forecasts," she said. For now HDFC sees the economy growing 8.2% in the next fiscal year.

Comments

Comments are closed.

Indian economy loses pace in Dec quarter, Ukraine clouds outlook

UN launches record $51.5bn funding appeal

Intra-day update: rupee maintains positive momentum against US dollar

US brands South Asian Al-Qaeda, TTP militants as global terrorists

Jul-Nov trade deficit shrinks 30.14pc to $14.406bn YoY

Deemed income on capital assets: Taxpayers required to file new form separately

PRL barred from shutting down this month

Oil prices edge higher on easing COVID curbs in China, firm dollar limits gains

No curbs on oil, LNG and POL products’ LCs: SBP

HSD, SKO & LDO: PL increased to generate Rs36.199bn

PM for implementation of agreement reached at COP27