The country's economic growth slowed down to 8.4 per cent for the quarter ended December 31, 2007, reflecting the apprehensions expressed in the Economic Survey that GDP expansion would fall below 9 per cent.

The GDP growth during the year-ago quarter had stood at 9.1 per cent, while growth during the full year 2006-07 had touched 9.6 per cent.

The Economic Survey, tabled in Parliament yesterday by Finance Minister P Chidambaram, had said economic expansion would cool to 8.7 per cent in 2007-08 due to sluggishness in consumer durables segment, infrastructure and industrial production.

"The new challenge is to maintain growth at these levels, not to speak of raising it further to double digit levels," the Survey, a report card on the economy, had said.

A downturn in manufacturing and construction sectors pulled down economic growth rate in the third quarter of this fiscal to 8.4 per cent from 9.1 per cent a year ago.

While the growth rate of the manufacturing sector came down to 9.3 per cent during October-December 2007 from 11.3 per cent in the corresponding period previous year, the construction sector growth rate dipped to 8.4 per cent from 10.8 per cent during the same period.

According to quarterly estimates of Gross Domestic Product released by the government on Friday, October- December quarter was the worst in 2007-08 in terms of economic growth (8.4 per cent), which in turn can make come true the fears expressed in the Economic Survey that GDP growth for the full fiscal would fall below 9 per cent.

The Economic Survey, tabled by Finance Minister P Chidambaram in Parliament yesterday, had said the economy during 2007-08 is expected to grow by 8.7 per cent. The GDP growth rate during nine month period (April- December 2007) worked out to be 8.9 per cent down from 9.6 per cent during the corresponding period last year.

The agriculture and allied sector growth rate during Q3 declined to 3.2 per cent from 3.4 per cent in the corresponding quarter in the last fiscal. The GDP growth rate was 9.3 per cent in the first quarter of this fiscal before it dipped to 8.9 per cent in Q2. The third quarter of 2007-08 is also the worst quarter in terms of growth since April 2006. 

The growth rate of the mining and quarrying sector dipped to 4.9 per cent in Q3 from 6.1 per cent during the corresponding period last fiscal.

Similarly in the financing, insurance, real estate and business services segment of the economy the growth rate declined to 11.6 per cent from 14.7 per cent during the corresponding quarter in the last fiscal.

The only sector, which performed better in Q3 was community, social and personal services which recorded a growth rate of 7.6 per cent, up from 5.6 per cent in the corresponding quarter in 2006-07.

As regards the nine-month period (April-December 2007), the manufacturing sector growth rate slipped to 9.9 per cent from 11.7 per cent in the corresponding period, confirming the fears of slowdown.

The signs of slowdown were also visible in the construction sector, which recorded a growth rate of 10 per cent during the nine-month period, down from 11.9 per cent in the corresponding period in the previous financial year.

The financing, insurance, real estate and business services segment growth rate during the first three quarters slipped to 11.1 per cent from 14.1 per cent.

Trade, hotels, transport and communication sectors, however, managed to retain the growth rate at 11.6 per cent during April-December 2007. The growth rate of this sector was 11.8 per cent in the corresponding period in the previous fiscal

At current prices, the GDP growth rate for the Q3 worked out to be 11.3 per cent, down from 15.5 per cent in the corresponding period during the last financial year. For the nine-month period, the GDP at current prices declined to 13.3 per cent from 15.3 per cent during April-December 2006.

PTI

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