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Chart of the day | Non-agri growth at same level as after Lehman bust

Chart of the day | Non-agri growth at same level as after Lehman bust

The GDP (gross domestic product) growth number that matters to the Reserve Bank of India (RBI) is non-agricultural growth, since monetary policy can have little impact on agricultural output. Growth in the non-agricultural part of the economy slowed to 6.8% in the third quarter (Q3) of 2011-12. This was the same rate of growth in the sector as notched up in Q4 of 2008-09, the quarter immediately after the Lehman bust and the worst quarter since the global financial crisis.

But one big reason for lower GDP growth during Q3 this fiscal was lower external demand. Export growth was 13.1% year-on-year during the quarter, while growth in imports was 17.3%. Compare that with export growth of 23.3% in Q2 and 23.2% in Q1. This indicates that while GDP growth has been decelerating, part of the deceleration is on account of external demand. On the other hand, domestic demand is not slowing by as much as the overall growth figures show.

Also See | Chart of the day (PDF)

PDF by Yogesh Kumar/Mint

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