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GDP growth rate will decline, growth rate may remain at 3.5 percent in the fourth quarter – News

GDP Growth Rate: The pace of India’s GDP growth rate may slow down. Rating agency Icra believes that the growth rate of Gross Domestic Product (GDP) is expected to fall to 3.5 percent in the fourth quarter of the financial year 2021-22, as against 5.4 percent in the third quarter.

Know why there may be a fall?
ICRA Ratings, in its estimate for the January-March 2022 quarter, released on Monday, said that the impact on margins due to rising commodity prices, decline in wheat yields and a higher relative base could lead to a GDP growth rate of 3.5 per cent.

The pace may slow down in the last quarter
Apart from this, due to the outbreak of Omicron, a new form of coronavirus in January-February, many services have also been affected. For this reason, the pace of growth may slow down in the last quarter of the financial year.

Data will be released on May 31
ICRA has said that GVA at base prices is expected to come down to 2.7 per cent in the fourth quarter as against 4.7 per cent in the third quarter. The National Statistical Office (NSO) will release the data for the fourth and final quarter of the financial year 2021-22 on May 31.

Know what Icra’s economist said
Aditi Nair, Chief Economist of ICRA, said the fourth quarter was a challenging time, with Omicron leading to the third wave of Kovid-19 and higher commodity prices reducing margins. Apart from this, due to more heat than normal in March itself, adverse effect was also seen on wheat production. “We expect GVA growth in both agriculture and industry to be less than 1 per cent in the fourth quarter, while the growth rate for the services sector is likely to be around 5.4 per cent,” Nair said.

The effect of reducing excise duty will be visible
Along with this, he said that reduction in excise duty on petrol and diesel will improve business sentiments and increase disposable income of consumers. Along with this, inflation based on the consumer-price index will also decline.

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