Expectations are self-fulfilling, if business think that they would hold till the economy bottoms out that would further deepen the slowdown, similarly if they expect that the economy would bounce back (higher GDP and income and demand) they would invest more which means further income and demand in the economy which means more investment...
If the business after fiscal monetary and monetary policy increase employment and demand that is also virtuous... Investment has been put on hold for a very longtime now... Corporate earnings have never bottomed out completely from the last slowdown during UPA... But, the corporate tax cut has artificially tried to increase corporate earnings to push fore the investment and demand cycle...
Lower growth rate expectations further lower growth rate "coz business invest less, that is the basic observation of Harrod-Domar... China has used higher projected growth rate to increase investment and growth of the economy... The RBI and Gov may avoid lower growth expectations while providing stimuli which are provided to increase growth expectations...
Lower growth often coincides with higher unemployment and lower prices which lower cost and makes the economy competitive and increase demand and spending and exports which is an incentive in itself... Nonetheless, expecting too much and delay in spending could worsen growth rate and expectations...
Lower growth and prices are the right time to increase consumption and investment to lower average cost of production and increase demand and supply or quantity and growth and expectations...
Give hope when others are hopeless... The economy has just caught cold, but the doctor has declared the patient dead... Very bad diagnosis... without providing any cure...
Growth has not gone down, the value of deflator has goneup... The mathematics is consistent 8% nominal GDP and 4% inflation, and a real GDP of 4%...
Real market interest rates are still much higher, the RBI may cut real repo rate to zero to lower real market rates which looks ideal because it is expected to maintain a neutral interest rate or r* to neither be accommodative nor restrictive, neither inflationary nor disinflationary at full employment... Lower borrowing cost could increase demand/supply and growth as long as there is unemployment in the economy... after which inflation might increase...
The data analysts are quoting is quite different from the data available on the web...
INDIA's GDP percapita income and GDP at constant prices have been continuously increasing which shows that there is no severe demand slowdown in the economy, but a blip... Constant prices are a way of measuring the real change in output.
The pattern we see every year is that June quarter is always good followed by a slowdown in September quarter but a better December quarter and then even a better March quarter more…
For instance money GDP at constant prices has decreased QoQ and but, increased yoy by 5%... INDIA's GDP from manufacturing has increased QoQ and slightly lower YoY...
INDIA is in the mid of a yearly cyclical slowdown which shows improvement in money GDP at the constant prices which has increased 1% on QoQ and is considerably higher than money GDP at constant prices YoY...
INDIA is in a yearly cyclical slowdown, in the agriculture and manufacturing too... GFCF has continuously increased under Modi government... It is Gov own Ministry of Statistics and Programme Implementation (MOSPI) data... December data show that GDP is expected to increase with higher margin...
Analyst lack understanding of the real GDP numbers... GDP at constant prices was 34139.97 inr billion in September quarter 2018 which increased to 35851.75 inr billion September quarter 2019, which increase 5% compared to last year... Therefore, if growth was 8% same quarter last year, this year’s growth rate should be higher (real gdp growth yoy... if we use the same base year
Economists use mathematics to verify their ideas... Because it never lies... 34139.97/100 equals 341.39 equals 1% and money GDP at constant prices increased 35851.75 - (from) 34139.97 equals 1711.78 then 8% would be 2731.21then 1711.78/341.39 ie 5%8+5=13% maths may not be right, but the economy has increased 1711.78 that is 5% higher than same quarter last year which would only add to 8% because growth has increase yoy...** figures in inr billion...
The point is that money GDP at constant prices has gone up compared to GDP at constant prices same quarter yoy... which means growth has increased compared to same quarter last year... when the economy grew, say 8% at a healthy pace... we are producing more than the last year... This year’s growth would higher than 8% if we use the same base year as for calculating growth rate previous year same quarter because we have produced more than last year ...
INDIA economy has increased more than double in the last 8 years... The statisticians are changing base year every year to calculate real GDP growth rate, but if we use 2011-12 as the base year for calculating real GDP growth rate the INDIA economy has increased considerably...
INDIA's real GDP growth rate for September 2019 if we use 2011-12 as the base year has been 35851.75 -13500 (app.)/13500*100 equals 165.57% in the last 8 yrs, with an annual growth rate, 165.57/8 equals 20% per year... using deflator of 4% the real growth rate would be 16%....
Lack of skills would depress wages of the skilled in sectors like the skilled engineering and medical, unskilled like agriculture, construction... Though, the Govt has restricted supply of CAs, CSs... Supply of the right skills could help maintain wages, incomes and demand and could attract investment...
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