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| Last Updated:: 27/03/2024

Economics

Global Economic Scenario and National Outlook

 

              The short-term economic forecast from the World Economic Situation and Prospects 2023 of United Nations predicts an imminent global economic downturn due to rising inflation, aggressive monetary tightening, and increased uncertainty.

 

              The World Economic Outlook of International Monetary Fund, October 2023 forecasts that the global growth is to slow from 3.5 per cent in 2022 to 3.0 per cent in 2023 and 2.9 per cent in 2024. Global inflation is forecast to decline steadily, from 8.7 per cent in 2022 to 6.9 per cent in 2023 and 5.8 per cent in 2024. Emerging market and developing economies are projected to have growth modestly decline, from 4.1 per cent in 2022 to 4.0 per cent in both 2023 and 2024, Global Economic Prospects, June 2023 of World Bank reiterates same.

 

            The UN statistics predicts that average GDP growth in India would moderate from 6.4 per cent in 2022 to 5.8 per cent in 2023, as higher interest rates and a global slowdown weigh on investment and exports. The World Economic Outlook of International Monetary Fund projected that the growth in India is to remain strong, at 6.3 per cent in both 2023 and 2024, with an upward revision of 0.2 percentage point for 2023, reflecting stronger than-expected consumption during April-June.

 

           The UN forecast a safe position for inflation levels in India at 7.1 per cent in 2022, and it is expected to decelerate to 5.5 per cent in 2023 as global commodity prices moderate and slower currency depreciation eases imported inflation.

 

National Income

 

           The provisional estimate of Gross Domestic Product in 2022-23, at constant prices is Rs 1,60,06,425 crore registering a growth of 7.2 per cent over previous year. This is around two points less than the GDP growth rate for 2021-22, which was 9.1 per cent. Gross Value Added for 2022-23, however shows 7 per cent growth, against 8.8 per cent for 2021-22. The per capita GDP for 202223 is Rs.1,15,746 with a 6.1 per cent growth over the previous year. The details of national income estimates are shown below:

 

 

                   The growth in GVA at current prices for 2022-23 is 15.4 per cent, and it is 7 per cent at constant prices. In absolute terms GVA at current prices was Rs. 2,47,42,871 crore for 2022-23. Similarly, GDP at current prices grew by 16.1 per cent against 7.2 per cent at constant prices. The growth figures of GVA and GDP at current prices for 2022-23 was lower than that of the previous year by two per cent points. The details of India’s GDP, NDP, GNI and NNI at current and constant (2011-12) prices from 2012-13 to 2022-23 with percentage change over the previous year are given below:

 

 

 

 

 

 

  

        The sectorial distribution of GVA at constant and current pricess are given below:

 
 

 
  
 

State Income

 

                 As per the quick estimates, the Gross State Domestic Product (GSDP) for Kerala during 2022-23 at constant prices of 2011-12 is Rs 6,16,18,850 lakh. The Gross State Value Added (GSVA) for the same period at constant prices is Rs 5,32,68,632 lakh, and the per capita GSDP is Rs 1,74,214. Details are given in below:

 

 

 

                  The GSDP growth rate for 2022-23 at constant prices was 6.6 per cent, which was 12.97 per cent in 2021-22. The GSVA growth at constant prices for the same period was 6.19 per cent, and that was 12.74 per cent during 2021-22.

 

Per Capita State Income

 

              Kerala is among the top ten States of India in terms of per-capita Gross State Domestic Product. Kerala’s per-capita GSDP was Rs 1,74,214 in 2022-23; the corresponding national average was Rs 1,15,746. In other words, average income per person in Kerala was 1.5 times the Indian average in 2022-23.

 

             Per capita NSDP for Kerala was 1,59,505 at constant prices, and 2,63,945 at current prices during 2022-23 (Quick estimate). The growth of per capita NSDP at constant prices was 6.25 per cent and it was 12.59 per cent at current prices. The figure below plots per capita NDP and NSDP between 2013-14 and 2022-23 at constant prices. Per capita NSDP for Kerala was higher than the per capita NDP for all India-level, for all the years of comparison.

 

 

Sectorial Composition

 

                The quick estimates of 2022-23 shows that the service sector continues to drive the State economy by contributing 62.62 percentage of GSVA during 2022-23, followed by industry and agriculture. The details of sector wise GSVA distribution was presented in the table below:

 

 

                  The composition of items as per the quick estimates shows that agriculture and allied activities constituted 8.52 percentage of GSVA during 2022-23. Construction was the biggest component of the secondary sector accounting for 13.79 per cent of GSVA during 2022-23. In tertiary and real estate, ownership of dwelling & professional services constitute the biggest group, accounting for 16.96 percentages in tertiary sector. Manufacturing, trade and repair services, Transport, storage, communication and services related to broadcasting, and financial services were also major contributors of the State economy. The figure below depicts the trends in GSVA in basic sectors of state economy from 2019-20 to 2022-23.

 

 

                  There was a spectacular recovery for all the sectors during 2021-22 following the COVID-19 shock. In 2020-21, GSVA of service sector declined by 15.18 per cent but there was a turnaround and growth of 16.74 per cent in 2021-22. In the case of agriculture, growth rates were always and pace of growth in 2022-23 was similar to that in the previous year. The industry sector exhibited a strong recovery with growth rate of 7.26 per cent during 2021-22, which rose further to 7.72 per cent in 2022-23.

 

                     The details of the sectoral distribution are given in Appendix 1.1.7 and 1.1.8 GSDP with percentage change over the previous years for the last four years is given in Appendix 1.1.9 . Details of GSVA, NSVA at constant and current prices during 2011-12 to 2022-23 are given at Appendix 1.1.10 , 1.1.11 , 1.1.12 , and 1.1.13.(Take from Economic Review Appendix vol 2)

 

Sector-wise Distribution of Value Added and Employment

 

                 The structure of the economy and workforce participation in Kerala is perceptibly different from the rest of India. The share of agriculture and allied activities in GVA is 15.13 per cent for agriculture and allied activities. But it employs 45.80 per cent of the work force during 202223, in India. However, in Kerala, there has been a large-scale withdrawal of workers from agriculture over the years, so that its share in total workforce participation is 27.27 per cent only in 2022-23 and which contributes 8.97 per cent of GSVA during 2022-23. The manufacturing sector contributes 12.66 per cent GSVA in Kerala and absorbs 10.91 per cent of work force. All India level, the sector employs 11.40 per cent of the work force and contribute only 17.72 per cent of the GVA. (Table 1.1.5).