Retail and wholesale trade industries led the increase in private inventory investment. The largest contributor to retail was inventory investment by automobile dealers. Increases in both products and services contributed to the increase in exports. Consumer products, industrial supplies and materials, and foods, feeds, and beverages were the biggest contributions to the growth in goods exports. Travel was the driving force behind the increase in service exports. The rise in PCE was mostly due to an increase in services, with health care, recreation, and transportation accounting for the majority of the increase. The increase in nonresidential fixed investment was mostly due to a rise in intellectual property items, which was partially offset by a drop in structures.
The reduction in federal spending was mostly due to lower defense spending on intermediate goods and services. State and local government spending fell as a result of lower consumption (driven by state and local government employee remuneration, particularly education) and gross investment (led by new educational structures). The rise in imports was mostly due to a rise in goods (led by non-food and non-automotive consumer goods, as well as capital goods).
After gaining 2.3 percent in the third quarter, real GDP increased by 6.9% in the fourth quarter. The fourth-quarter increase in real GDP was primarily due to an increase in exports, as well as increases in private inventory investment and PCE, as well as smaller decreases in residential fixed investment and federal government spending, which were partially offset by a decrease in state and local government spending. Imports have increased.
In the fourth quarter, current dollar GDP climbed 14.3% on an annual basis, or $790.1 billion, to $23.99 trillion. GDP climbed by 8.4%, or $461.3 billion, in the third quarter (table 1 and table 3).
In the fourth quarter, the price index for gross domestic purchases climbed 6.9%, compared to 5.6 percent in the third quarter (table 4). The PCE price index climbed by 6.5 percent, compared to a 5.3 percent gain in the previous quarter. The PCE price index increased 4.9 percent excluding food and energy prices, compared to 4.6 percent overall.
Personal Income
In the fourth quarter, current-dollar personal income climbed by $106.3 billion, compared to $127.9 billion in the third quarter. Increases in compensation (driven by private earnings and salaries), personal income receipts on assets, and rental income partially offset a decline in personal current transfer receipts (particularly, government social assistance) (table 8). Following the end of pandemic-related unemployment programs, the fall in government social benefits was more than offset by a decrease in unemployment insurance.
In the fourth quarter, disposable personal income grew $14.1 billion, or 0.3 percent, compared to $36.7 billion, or 0.8 percent, in the third quarter. Real disposable personal income fell 5.8%, compared to a 4.3 percent drop in the previous quarter.
In the fourth quarter, personal savings totaled $1.34 trillion, compared to $1.72 trillion in the third quarter. In the fourth quarter, the personal saving rate (savings as a percentage of disposable personal income) was 7.4 percent, down from 9.5 percent in the third quarter.
GDP for 2021
In 2021, real GDP climbed 5.7 percent (from the 2020 annual level to the 2021 annual level), compared to a 3.4 percent fall in 2020. (table 1). In 2021, all major subcomponents of real GDP increased, led by PCE, nonresidential fixed investment, exports, residential fixed investment, and private inventory investment. Imports have risen (table 2).
PCE increased as both products and services increased in value. “Other” nondurable items (including games and toys as well as medications), apparel and footwear, and recreational goods and automobiles were the major contributors within goods. Food services and accommodations, as well as health care, were the most significant contributors to services. Increases in equipment (dominated by information processing equipment) and intellectual property items (driven by software as well as research and development) partially offset a reduction in structures in nonresidential fixed investment (widespread across most categories). The rise in exports was due to an increase in products (mostly non-automotive capital goods), which was somewhat offset by a drop in services (led by travel as well as royalties and license fees). The increase in residential fixed investment was primarily due to the development of new single-family homes. An increase in wholesale commerce led to an increase in private inventory investment (mainly in durable goods industries).
In 2021, current-dollar GDP expanded by 10.0 percent, or $2.10 trillion, to $22.99 trillion, compared to 2.2 percent, or $478.9 billion, in 2020. (tables 1 and 3).
In 2021, the price index for gross domestic purchases climbed by 3.9 percent, compared to 1.2 percent in 2020. (table 4). Similarly, the PCE price index grew 3.9 percent, compared to 1.2 percent in the previous quarter. The PCE price index climbed 3.3 percent excluding food and energy expenses, compared to 1.4 percent overall.
Real GDP rose 5.5 percent from the fourth quarter of 2020 to the fourth quarter of 2021 (table 6), compared to a 2.3 percent fall from the fourth quarter of 2019 to the fourth quarter of 2020.
From the fourth quarter of 2020 to the fourth quarter of 2021, the price index for gross domestic purchases grew 5.5 percent, compared to 1.4 percent from the fourth quarter of 2019 to the fourth quarter of 2020. The PCE price index climbed by 5.5 percent, compared to 1.2 percent for the year. The PCE price index increased 4.6 percent excluding food and energy, compared to 1.4 percent overall.
Source Data for the Advance Estimate
A Technical Note that is issued with the news release on BEA’s website contains information on the source data and major assumptions utilized in the advance estimate. Each version comes with a thorough “Key Source Data and Assumptions” file. Refer to the “Additional Details” section below for information on GDP updates.
What will 2021’s GDP be?
In its second advance estimates of national accounts released on Monday, the National Statistical Office (NSO) forecasted the country’s growth for 2021-22 at 8.9%, slightly lower than the 9.2% estimated in its first advance estimates released in January.
Furthermore, the National Statistics Office (NSO) reduced its estimates of GDP contraction for the coronavirus pandemic-affected last fiscal year (2020-21) to 6.6 percent. The previous projection was for a 7.3% decrease.
In April-June 2020, the Indian economy contracted 23.8 percent, and in July-September 2020, it contracted 6.6 percent.
“While an adverse base was expected to flatten growth in Q3 FY2022, the NSO’s initial estimates are far below our expectations (6.2 percent for GDP), with a marginal increase in manufacturing and a contraction in construction that is surprising given the heavy rains in the southern states,” said Aditi Nayar, Chief Economist at ICRA.
“GDP at constant (2011-12) prices is estimated at Rs 38.22 trillion in Q3 of 2021-22, up from Rs 36.26 trillion in Q3 of 2020-21, indicating an increase of 5.4 percent,” according to an official release.
According to the announcement, real GDP (GDP) or Gross Domestic Product (GDP) at constant (2011-12) prices is expected to reach Rs 147.72 trillion in 2021-22, up from Rs 135.58 trillion in the first updated estimate announced on January 31, 2022.
GDP growth is expected to be 8.9% in 2021-22, compared to a decline of 6.6 percent in 2020-21.
In terms of value, GDP in October-December 2021-22 was Rs 38,22,159 crore, up from Rs 36,22,220 crore in the same period of 2020-21.
According to NSO data, the manufacturing sector’s Gross Value Added (GVA) growth remained nearly steady at 0.2 percent in the third quarter of 2021-22, compared to 8.4 percent a year ago.
GVA growth in the farm sector was weak in the third quarter, at 2.6 percent, compared to 4.1 percent a year before.
GVA in the construction sector decreased by 2.8%, compared to 6.6% rise a year ago.
The electricity, gas, water supply, and other utility services segment grew by 3.7 percent in the third quarter of current fiscal year, compared to 1.5 percent growth the previous year.
Similarly, trade, hotel, transportation, communication, and broadcasting services expanded by 6.1 percent, compared to a decline of 10.1 percent a year ago.
In Q3 FY22, financial, real estate, and professional services growth was 4.6 percent, compared to 10.3 percent in Q3 FY21.
During the quarter under examination, public administration, defense, and other services expanded by 16.8%, compared to a decrease of 2.9 percent a year earlier.
Meanwhile, China’s economy grew by 4% between October and December of 2021.
“India’s GDP growth for Q3FY22 was a touch lower than our forecast of 5.7 percent, as the manufacturing sector grew slowly and the construction industry experienced unanticipated de-growth.” We have, however, decisively emerged from the pandemic recession, with all sectors of the economy showing signs of recovery.
“Going ahead, unlock trade will help growth in Q4FY22, as most governments have eliminated pandemic-related limitations, but weak rural demand and geopolitical shock from the Russia-Ukraine conflict may impair global growth and supply chains.” The impending pass-through of higher oil and gas costs could affect domestic demand mood, according to Elara Capital economist Garima Kapoor.
“Strong growth in the services sector and a pick-up in private final consumption expenditure drove India’s real GDP growth to 5.4 percent in Q3.” While agriculture’s growth slowed in Q3, the construction sector’s growth became negative.
“On the plus side, actual expenditure levels in both the private and public sectors are greater than they were before the pandemic.
“Given the encouraging trends in government revenues and spending until January 2022, as well as the upward revision in the nominal GDP growth rate for FY22, the fiscal deficit to GDP ratio for FY22 may come out better than what the (federal) budget projected,” said Rupa Rege Nitsure, group chief economist, L&T Financial Holdings.
“The growth number is pretty disappointing,” Sujan Hajra, chief economist of Mumbai-based Anand Rathi Securities, said, citing weaker rural consumer demand and investments as reasons.
After crude prices soared beyond $100 a barrel, India, which imports virtually all of its oil, might face a wider trade imbalance, a weaker rupee, and greater inflation, with a knock to GDP considered as the main concern.
“We believe the fiscal and monetary policy accommodation will remain, given the geopolitical volatility and crude oil prices,” Hajra added.
According to Nomura, a 10% increase in oil prices would shave 0.2 percentage points off India’s GDP growth while adding 0.3 to 0.4 percentage points to retail inflation.
Widening sanctions against Russia are likely to have a ripple impact on India, according to Sakshi Gupta, senior economist at HDFC Bank.
“We see a 20-30 basis point downside risk to our base predictions,” she said. For the time being, HDFC expects the GDP to rise 8.2% in the coming fiscal year.
In 2020, what will the actual GDP be?
The fourth quarter saw a 6.7 percent growth in real gross output, which is a measure of an industry’s sales or receipts, which includes sales to final users in the economy (GDP) and sales to other industries (intermediate inputs). Government remained constant, but private goods-producing businesses grew by 7.2 percent and private services-producing sectors grew by 7.8 percent (table 16). Durable goods manufacturing, professional, scientific, and technical services, and health care and social support were among the 22 industry categories that contributed to the growth in real gross production. Educational services, utilities, and housing and food services were among the industries that saw significant declines in gross output.
In 2020, real GDP fell 3.5 percent (from the 2019 annual level to the 2020 annual level), compared to a 2.2 percent growth in 2019. (table 1).
PCE, exports, private inventory investment, nonresidential fixed investment, and state and local government decreased real GDP in 2020, partially offset by increases in federal government spending and residential fixed investment. Imports are down (table 2).
A drop in services more than compensated for the decrease in PCE in 2020. (led by food services and accommodations, health care, and recreation services). The drop in exports was due to a drop in both services (driven by travel) and goods (mainly non-automotive capital goods). Private inventory investment fell as a result of broad losses in retail trade (mostly auto dealers) and wholesale trade (mainly durable goods industries). Structures (dominated by mining exploration, shafts, and wells) and equipment (headed by transportation equipment) decreased in nonresidential fixed investment, which was partly offset by an increase in intellectual property products (more than accounted for by software). The drop in state and local government spending corresponded to a drop in consumer spending (led by compensation).
In 2020, the increase in federal government spending reflected an increase in nondefense consumer spending (led by an increase in purchases of intermediate services that supported the processing and administration of Paycheck Protection Program loan applications by banks on behalf of the federal government). Increases in upgrades, as well as brokers’ commissions and other ownership transfer costs, accounted for the majority of the increase in residential fixed investment.
In 2020, current-dollar GDP fell 2.3 percent, or $496.6 billion, to $20.94 trillion, compared to a 4.0 percent growth, or $821.3 billion, in 2019. (tables 1 and 3).
In 2020, the price index for gross domestic purchases climbed by 1.2 percent, compared to 1.6 percent in 2019. (table 4). In 2020, the PCE price index climbed 1.2 percent, compared to 1.5 percent in 2019. The PCE price index grew 1.4 percent excluding food and energy expenses, compared to 1.7 percent overall.
Real GDP fell by 2.4 percent in 2020, when measured from the fourth quarter of 2019 to the fourth quarter of 2020. (table 6). In comparison, in 2019 there was a 2.3 percent gain.
The price index for gross domestic purchases grew 1.2 percent in 2020, as assessed from the fourth quarter of 2019 to the fourth quarter of 2020. In comparison, in 2019 there was a 1.4 percent gain. The PCE price index climbed by 1.2 percent, compared to a 1.5 percent increase in the previous quarter. The PCE price index grew 1.4 percent excluding food and energy, compared to 1.6 percent overall.
In 2020, real GDI fell 3.5 percent, compared to a rise of 1.8 percent in 2019. (table 1). In 2020, the average of real GDP and real GDI fell 3.5 percent, compared to a 2.0 percent growth in 2019.
Profits from current output fell $130.2 billion in 2020, compared to a $7.6 billion increase in 2019. (table 10). Domestic financial businesses’ profits fell by $0.5 billion, compared to an increase of $38.0 billion. Domestic nonfinancial firms’ profits fell $55.7 billion, compared to a $23.3 billion drop in the previous year. Profits in the rest of the world fell $74.0 billion, compared to a $7.1 billion drop in the United States. Receipts fell $117.8 billion in 2020, while payments fell $43.8 billion.
Private goods-producing industries fell 2.7 percent in 2020, private services-producing industries down 3.9 percent, and government fell 2.1 percent (table 12). In total, 16 of the 22 industry groupings contributed to the real GDP decline in 2020. (table 13).
Is a higher or lower GDP preferable?
Gross domestic product (GDP) has traditionally been used by economists to gauge economic success. If GDP is increasing, the economy is doing well and the country is progressing. On the other side, if GDP declines, the economy may be in jeopardy, and the country may be losing ground.
What accounts for India’s low GDP?
There are two things that stand out. The Indian economy began to revive in March 2013 more than a year before the current government took office after a period of contraction following the Global Financial Crisis.
But, more importantly, since the third quarter of 2016-17 (October to December), this recovery has transformed into a secular slowing of growth. While the RBI did not declare so, many experts believe the government’s move to demonetise 86 percent of India’s currency overnight on November 8, 2016, was the catalyst that sent the country’s GDP into a tailspin.
The GDP growth rate steadily fell from over 8% in FY17 to around 4% in FY20, just before Covid-19 hit the country, as the ripples of demonetisation and a poorly designed and hastily implemented Goods and Services Tax (GST) spread through an economy already struggling with massive bad loans in the banking system.
PM Modi voiced hope in January 2020, when GDP growth fell to a 42-year low (in terms of nominal GDP), saying: “The Indian economy’s high absorbent capacity demonstrates the strength of the country’s foundations and its ability to recover.”
The foundations of the Indian economy were already weak in January last year well before the outbreak as an examination of key factors shows. For example, in the recent past (Chart 2), India’s GDP growth trend mirrored an exponential development pattern “Even before Covid-19 came the market, there was a “inverted V.”
In 2050, which country will be the wealthiest?
The Gross Domestic Product of the United Kingdom is expected to be 3.58 trillion US dollars in 2050, with a per capita income of 49,412 US dollars. The current economic wealth disparity between the United Kingdom and Germany will narrow dramatically. With the annual expected rise in the UK working population, BZZZZy 2050 (from 346 billion US dollars to 138 billion US dollars). Although the long-term effects of Brexit are more difficult to forecast, the United Kingdom’s economic league table is likely to drop only one rank.
What will India’s GDP be in 2021?
According to Trading Economics global macro models and analysts, India’s GDP is predicted to reach 2850.00 USD billion by the end of 2021. According to our econometric models, India’s GDP will trend around 3000.00 USD Billion in 2022 and 3450.00 USD Billion in 2023 in the long run.
Which country has the highest GDP in 2021?
The United States and China would rank first and second in both methodology’ gdp rankings by 2021. The nominal gap between the US and China is narrowing, since China’s gdp growth rate of 8.02 percent in 2021 is higher than the US’s 5.97 percent. In nominal terms, the United States will be $6 trillion ahead of China in 2021. On a per-person basis, China surpassed the United States in 2017 and is now ahead by $4 trillion, with the gap widening. On a per capita basis, China will continue to be the world’s greatest economy for the next few decades, since the US, which is rated second, grows slowly and India, which is placed third, lags far behind.
In terms of nominal GDP, the top ten would remain same. Iran has surpassed the Netherlands, Saudi Arabia has surpassed Turkey, and Switzerland has surpassed Switzerland on the top 20 list. South Africa’s economic ranking would rise eight places in the top 50, while Egypt would drop four places.
There would be no change in the top 10 list in the ppp ranking. Taiwan overtaking Australia is another change in the top 20. Ireland will move up three places in the top 50.
In 2021, all of the economies in the top 50 will grow at a positive rate. With a 14.04 percent growth rate, Ireland is the fastest-growing economy, followed by Chile (11.00 percent ). Thailand has the slowest growth rate, at 0.96 percent, followed by the UAE (2.24 percent) and Japan (2.36 percent ).
In nominal terms, the United States (1,5) appears on both lists of the top 10 GDP and GDP per capita. In terms of GDP and GDP per capita, Germany (4,17), Canada (9,15), Australia (13,9), the Netherlands (18,12), and Switzerland (20,3) are among the top twenty countries. In both rankings, the United States (2,8) is in the top 10, while Germany (5,18) and Taiwan (18,15) are in the top twenty.
Which country is the poorest in the world?
Burundi, a small landlocked country ravaged by Hutu-Tutsi ethnic conflict and civil violence, has the terrible distinction of being the poorest country on the planet. Food scarcity is a serious concern, with almost 90 percent of its approximately 12 million residents reliant on subsistence agriculture (with the overwhelming majority of them surviving on $1.25 a day or less), and food insecurity is about twice as high as the norm for Sub-Saharan African countries. Furthermore, access to water and sanitation is still limited, and only about 5% of the population has access to electricity. Needless to say, the epidemic has worsened all of these issues.
How did things get to this point, despite the fact that the civil war officially ended 15 years ago? Infrastructure deficiencies, widespread corruption, and security concerns are all common causes of extreme poverty. In 2005, Pierre Nkurunziza, a charismatic former Hutu rebel who became president, was able to unite the country behind him and begin the process of reconstructing the economy. However, in 2015, his announcement that he would run for a third termwhich the opposition claimed was illegal under the constitutionreignited old feuds. Hundreds of people were killed in fighting, and tens of thousands were internally or externally displaced as a result of the failed coup attempt.
Nkurunziza died in the summer of 2020, at the age of 55, from cardiac arrest, while it is widely assumed that Covid-19 was the true reason. Days later, Evariste Ndayishimiye, an ex-general designated by Nkurunziza to succeed him when his term expired, was sworn in. His track record has been mixed so far. While he, like his predecessor, minimized the virus’s severity, and claims of human rights violations continue to emerge from the country, he made an effort to relaunch the economy and mend diplomatic relations with his African neighbors, particularly the West. His efforts were rewarded: the United States and the European Union recently withdrew financial restrictions imposed in the aftermath of the 2015 political turmoil, resuming aid to Burundi. Could this be a watershed moment for the world’s poorest country?
Which country is the most powerful in the world?
In the 2021 Best Countries Report, Canada wins the top overall rank as the world’s number one country for the first time. After coming in second place in the 2020 report, Canada has now eclipsed Switzerland in the 2021 report, with Japan, Germany, Switzerland, and Australia following closely behind.