InvestorQ : What was the reason for the sharp fall in GDP in the fourth quarter ended Mar-20?
Katherine Gonsalves made post

What was the reason for the sharp fall in GDP in the fourth quarter ended Mar-20?

Answer
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Rutuja Nigam answered.
4 months ago


The GDP growth for the fourth quarter ended Mar-20 came in at 3.2% with the full year growth pegged at 4.1%. This is nearly 200 bps lower than what the street had anticipated for the full year. This is only partially due to the lockdown because the 7 days lockdown in March cannot explain such a sharp fall in GDP growth. The pressure came from manufacturing and services. Manufacturing fell from above 5% in the previous year to just 0.03% in this year. The biggest constituent of services saw pressure on most key segments like financial services, tourism, travel, transport, utilities etc. That added up to a sharp fall but the real pressure could be seen in the June and September quarters when the full impact of the lockdown and its lag effect would be effectively experienced.