Mehangai Dayan Khaye Jaat Hai

Yesterday the quarter results of GDP came out it has declined to 0.5% as compared to previous quarter which was 8.3%. Currently the GDP is 7.8%.The main reason why the GDP has fallen is due to rise in interest rates and inflation.

Let me elaborate due to inflation or rise in interest rates no company is keen in manufacturing or producing goods so due to this the growth of the economy falls and it is not a good indication from the growth prospective, especially for developing economy.

Economists said they expect growth to moderate in the current fiscal year and a majority said it could be in the range of 8%, matching the estimates of the Reserve Bank of India. A moderation indicates that the economy would continue to grow — but at a slower pace.

Important thing to analyze is that agriculture grew at 7.5% whereas mining sector was affected due to the "GREEN MAN" Jairam ramesh interference in the environmental factors leading to closure or non approval for setting up of plants. The growth slowed down to 1.7%.

Thus Consumption spending growth slowed to 8% in the January-March quarter from 8.9% in the first quarter. If such situation will prevail the there will be a tough time for people as Inflation is very dominating factor to tame it is a tough job, Prices of commodity and basic need keeps on increasing and if the GDP keep on falling quarter to quarter then there will be recession and once again the saing will be true "MEHANGAI DAYAN KHAYE JAAT HAI"


Stevenson
Management Trainee- Fundamental Analyst
Denip Consultants Pvt. Ltd.