First GDP Advance

Description

Figure 3: No Copyright Infringement Intended

Context:

The National Statistical Office (NSO) released the First Advance Estimates (FAE) for the current financial year (2021-22 or FY22).

What is your first GDP forecast?

First introduced in 2016-17, usually released at the end of the first week of January.
These are the "first" official estimates of how GDP is expected to grow this year.
However, it is also a "provisional value" because it was announced long before the fiscal year end (April to March).
FAE will be released shortly after the end of the third quarter (October, November, December).
It does not include formal third quarter GDP data released as part of the Second Preliminary Estimate (SAE) in late February.

Methodology:

FAE is derived by extrapolating the available data.
From a budgetary perspective, it's important to note what happened to nominal GDP-both absolute levels and their growth rate.
Real GDP, or GDP after deducting the effects of inflation, is the key figure derived.
All Budget calculations start with the nominal GDP. Real GDP = Nominal GDP — Inflation Rate The difference between the real and nominal GDP shows the levels of inflation in the year.

Findings:

GDP Growth: India's Gross Domestic Product (GDP) is expected to grow 9.2% this fiscal year after shrinking 7.3% in the previous fiscal year.
It is underpinned by increased production in agriculture, mining and manufacturing.
“Mining and quarrying (14.3%)” and “Commercial, hotel, transportation, telecommunications and broadcasting related services” (11.9%) recorded significant increases.
After that, the manufacturing industry will increase by 12.5%. The growth rate for the past 12 months is estimated to be 3.9% in the agricultural sector in 2010, which is higher than the growth of 3.6% in the previous fiscal year.
Low consumer spending: Demand for consumer spending remains low, and investment in the economy and government spending are expected to improve.
Private consumption typically accounts for more than 55% of total GDP. Levels are expected to remain widely maintained at the 2019-20 level.
Such weak private demand will make it difficult to sustain economic growth in the coming months and years.

Extra information-

Gross domestic product:

● This is the monetary value of all manufactured goods and services produced in the country during a particular period.

● It provides an economic snapshot of a country used to estimate the size of an economy and its growth rate.

● It can be calculated in three ways using spending, output, or income, and can be adjusted around inflation and population size to gain deeper insights.

Gross Value Added:

● It is the value of production minus intermediate consumption and is a measure of the contribution of an individual manufacturer, branch, or sector to growth.

● It gives a rupee value for the number of goods and services produced in the economy, after deducting the costs of the inputs and raw materials used to produce those goods and services.