• UGI USER
  • Jan 09, 2024
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GDP DATA ANALYSIS: INDIA’S ECONOMIC OUTLOOK

Why in the News?

  • According to Advance Estimates are released by National Statistical Office (NSO), India’s GDP expected to grow by 7.3% in 2023-24, surpassing earlier expectations.
  • First Advance Estimates(FAE), released annually in January, form the basis for the Union Budget numbers.

About Advance Estimates:

  • Advance Estimates are released by National Statistical Office (NSO) under the Ministry of Statistics and Programme Implementation (MoSPI).
  • First introduced in 2016-17.
  • Published at the start of January each year.
  • “Advance” estimates released before the fiscal year concludes.
  • Published after the third quarter (Q3) ends.
  • Does not incorporate formal Q3 GDP data.
Source: IE

Key Highlights – Engines of GDP Growth:

  • Private Final Consumption Expenditure (PFCE) :
  • Expected to grow by 4.4% in the current year.
  • Muted performance and growing inequality raise concerns.
  • Investment Spending i.e. Gross Fixed Capital Formation (GFCF):
  • Grows by 9.3%, signalling optimism for the economy.
  • Concerns linger about government dependence and muted private consumption.
  • Government Spending :
  • Shows slow growth at 3.9%, reflecting challenges in the second term.
  • Compounded Annual Growth rate(CAGR) of 2.8% in the second term, lower than the 7.9% in the first term.
  • Net Exports:
  • Negative growth rates show a drag effect, but with a mild improvement.
  • Decelerates from 19.6% to 13.3% over the two terms, indicating a positive trend.
Key Terms

·    Gross Fixed Capital Formation (GFCF):

Measures the increase in fixed assets, like buildings or machinery, reflecting investments in the productive capacity of the economy.

·    Compounded Annual Growth Rate (CAGR):

Represents the average annual growth rate over a specified period, smoothing fluctuations for a comprehensive understanding of growth.

·    Private Final Consumption Expenditure (PFCE):

Signifies spending by individuals, representing almost 60% of India’s GDP, covering goods and services consumed by households.

·   Real GDP :

Source: WallStreet Mojo