Broadly in line with expectations, the Indian economy grew by 4.1 per cent in the fourth quarter (January-March) of the last financial year (2021-22), as per the latest data released by the National Statistical Office. For the full year, the economy is now estimated to have grown by 8.7 per cent, marginally lower than the earlier estimate of 8.9 per cent released at the end of February. However, the latest estimates imply that at the end of 2021-22, the economy is only 1.5 per cent higher than its pre-pandemic level, as both private consumption and investment — the two major drivers of growth — continue to be subdued.
Leading economic indicators suggest the momentum of economic activity in the weeks and months thereafter has remained healthy. Growth is also likely to be aided by a low base effect. However, the recovery is neither broad-based nor fully entrenched. Moreover, the combination of slower global growth and higher commodity prices, especially crude oil, will act as headwinds.
