The investment rate in the economy, broadly tracked by gross fixed capital formation (GFCF), suggests a mild quarterly improvement at 29.8 per cent of GDP at 2011-12 prices. In January-March 2017, GFCF was estimated at 28.5 per cent, lower than 29.4 per cent and 29.5 per cent in the previous two quarters. The mild quarterly recovery, however, is still way below the 31 per cent mark reached in the April-June months of 2016.
A clear positive from the latest GVA numbers comes from services (trade, hotels, transport, communication and broadcasting) with the only double-digit growth of 11.1 per cent for the latest quarter, compared to 8.9 per cent in the same months in 2016. In all the past three quarters, this sector clocked growth rates of 6.5-8.3 per cent, showing that the April-June 2017 pick-up is significant.
There is a mild recovery in the financial, real estate and professional services at 6.4 per cent, coming after 2-3 per cent growth rates recorded in the previous two quarters. Government spending captured through public administration and defence maintained a healthy rate of 9.5 per cent, which was higher than 8.5 per cent in April-June 2016, but much below the 17 per cent rate clocked in the January-March 2017 quarter.
The mining and quarrying sector continues to be a cause for concern, showing the only contraction of 0.7 per cent for the latest quarter, coming on top of a similar contraction of 0.9 per cent in the April-June months of 2016. Agriculture has expectedly returned a GVA growth rate of 2.3 per cent in April-June 2017, almost the same as it did in the same period of 2016.
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