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LATEST NEWS UPDATES | A difficult time for the economy -Renu Kohli

A difficult time for the economy -Renu Kohli

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published Published on Oct 22, 2019   modified Modified on Oct 22, 2019
-The Telegraph

It must be ensured that growth does not slide down further

Economic news has been increasingly dismal for some time. The decline in economic activities since January-March 2018 accelerated this year, gathering pace in recent months and prompting concern it could turn into a recession. Some commentators argue the economy is in a recession; others disagree, saying growth is decelerating. Since recessions are defined as periods of negative real gross domestic product growth (two consecutive quarters of decline is a thumb rule) in real gross domestic product, the Indian economy is not in a recession. The real GDP metric is considered too narrow by many researchers who prefer using a wider set of economic activity measures to determine recessionary trends, for example, the National Bureau of Economic Research, which documents recessions in the United States of America, focuses on a comprehensive set of measures such as unemployment, income, sales, and industrial production. The latter approach also merits use because of a long lag in GDP data publication and instances when deceleration gains momentum, as is the case in India right now. Analysing a range of measures provides a better grip on recessionary trends as we see here.

Regular unemployment and aggregate sales data are unavailable, but several high-frequency indicators exist. Many show contractionary tendencies; some recent, others more established, with pervading and deepening signs. Manufacturing is the worst, but services are not far behind.

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The Telegraph, 22 October, 2019, https://www.telegraphindia.com/opinion/a-difficult-time-for-the-economy/cid/1713315?ref=opinion_opinion-page


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