Investment in India
India - Investment
Economic growth slumps in January–March
Economic growth slowed in the first quarter of calendar year 2020 (the fourth quarter of fiscal year 2019), with GDP expanding 3.1% (Q4: +4.1% year-on-year), which is the slowest reading since at least 2012. The 3.1% reading was better than market analysts had expected, though, with 2.1% growth being the general expectation.
The Q1 reading is yet to fully take into account the economic effects of the national lockdown announced on 25 March due to the coronavirus pandemic; these effects will be more visible in the national accounts data for Q2 onwards.
Private consumption growth fell to an over five-year low of 2.7% in the first quarter (Q4: +6.6% yoy). Meanwhile, fixed investment declined at a sharper pace of 6.5% in Q1, down from the 5.2% decrease in the previous quarter. However, public spending ticked up marginally to a 13.6% increase in Q1 (Q4: +13.4% yoy).
On the external front, exports of goods and services contracted 8.5% in Q1, marking the worst reading since Q4 2015 (Q4: -6.1% yoy). Conversely, imports of goods and services declined at a slower pace of 7.0% in Q4 (Q4: -12.4% yoy).
Given that extensions to the national lockdown have been announced since it was first implemented, coupled with the effects of the global economic downturn, Kunal Kumar Kundu, India economist at Société Générale, said:
“We now expect 2Q20 to be a virtual washout, with the economy likely to contract by as much as 20.8% yoy. We see a further contraction in 3Q20, as rebooting the economy will likely take longer than expected.”
Our panelists see the economy contracting 0.2% in FY 2020, which runs from April 2020 to March 2021, which is down 1.6 percentage points from last month’s forecast. In FY 2021, our panel projects GDP to expand 7.2%.
India - Investment Data
|Investment (annual variation in %)||6.5||8.5||7.2||9.8||-|
5 years of economic forecasts for more than 30 economic indicators.
India Investment Chart
Source: Ministry of Statistics and Programme Implementation and FocusEconomics calculations.
|Bond Yield||6.50||-0.04 %||Jan 01|
|Exchange Rate||71.23||-0.09 %||Jan 01|
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August 4, 2020
The composite Purchasing Managers’ Index (PMI) produced by IHS Markit eased marginally to 37.2 in July from 37.8 in June.
July 3, 2020
The composite Purchasing Managers’ Index (PMI) produced by IHS Markit climbed to 37.8 in June from 14.8 in May.
June 15, 2020
Merchandise exports fell 36.5% in year-on-year terms in May, after falling an historic 60.3% in April (the sharpest fall since at least the early 1990s), amounting to USD 19.1 billion.
June 15, 2020
The National Statistical Office of India released only partial consumer price index (CPI) data for May, as it did previously for April, because of logistical issues related to the coronavirus pandemic.
June 12, 2020
Industrial output fell 55.5% in year-on-year terms in April, which was a larger contraction than March's 18.3% decrease.