Growth slipped to 7.8 per cent in the Fourth Quarter of 2010-11

The Gross Domestic Product (GDP) data was released on 31 May 2011 by the Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation. According to the data, the country's GDP (gross domestic product) growth slipped to 7.8 per cent in the fourth quarter (January-March) of 2010-11. The slowdown was believed to be the result of inflationary pressures and the impact of a consequent on-going tight money policy and a poor showing by the manufacturing sector.

Robust farm sector growth coupled with better showing by construction and financial services propped up the overall GDP growth for the entire 2010-11 fiscal year to 8.5 per cent from 8 per cent in the previous fiscal.

The fourth quarter growth of 2010-11 was way lower than the 9.4 per cent expansion in the same three-month period of 2009-10.

The general consensus within the government, industry and economic analysts is that the declining growth trend seen in the last quarter of 2010-11 is likely to continue through a major part of the current fiscal also.

The GDP growth numbers for the first and third quarters of 2010-11 stand revised upwards to 9.3 per cent from the earlier estimate of 8.9 per cent and to 8.3 per cent from 8.2 per cent.  However the slump in manufacturing growth which dipped to 5.5 per cent during the January-March quarter in 2010-11 from a robust 15.2 per cent in the same quarter of 2009-10 was disconcerting. The growth in the mining and quarrying sector also slipped to a mere 1.7 per cent during the quarter from 8.9 per cent in the same period of 2009-10.

The farm sector which saw a healthy growth of 7.5 per cent during the fourth quarter ending March 2011 as compared to a paltry increase of 1.1 per cent witnessed in the year-ago period helped to raise the GDP.

Advance estimate for the quarter ending 31 March 2011 was 8.6 per cent on 7 February 2011. Currently the revised estimate for the same quarter is 8.5 per cent.