InvestorQ : Was the GDP growth in Jun-21 quarter purely only due to base effect?
Anamika Sodhani made post

Was the GDP growth in Jun-21 quarter purely only due to base effect?

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Angel dcosta answered.
3 months ago
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Let me answer you question in two parts. Firstly, I will tell you why it is the base effect. I will also tell you how it is just not base effect in some parts. It is base effect because GDP was down -23.9% over Jun-20 quarter. On that low base, Jun-21 GDP growth is bound to look good. The problem is that by the Sep-21 quarter, base effect advantage will be much lesser. That is when the real picture of GDP will come and then you need genuine growth.

However, there are 2 things you must not miss out. Firstly, if you look at 2021 over 2019, then real GDP is still down but nominal GDP is up. That means, a lot of the pressure on GDP has come due to inflation in last 2 years. Secondly, exports are 19.5% above the Jun-19 quarter levels while imports are 4.4% higher. What it shows is that “Make in India” and “Atma Nirbhar Bharat” have at least managed to boost exports in tough times.

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