THIRUVANANTHAPURAM: Kerala's economy's growth has taken a sharp decline to 3.46 per cent in 2019-20 from 6.49 per cent in 2018-19 as last three years' natural calamities affected the productive sectors of the state's economy, according to the Economic Review 2020, tabled in the Assembly on Thursday.
Compounding to the woes is the estimate by the State Planning Board that Kerala's economy in terms of Gross State Value Added (GSVA) to shrink by 26 per cent in the first quarter of 2020-21 due to the crisis caused by the Covid19 pandemic and the consequent lockdown.
The review said the Cyclone Ockhi in 2017, and severe floods resulting from extreme rainfall events in 2018 and 2019 have started to hit the state's economy. "The natural disasters ravaged the State economy affecting the lives and livelihoods of many and adversely affecting productive sectors of the economy," the Review, which comes a day before the Kerala budget on Friday, said.
While the national growth rates plummeted to 4.2 per cent in 2019-20 from 6.1 per cent in 2018-19, Kerala’s GSDP growth exceeded national rates in 2018-19 and grew at 6.49 per cent decline in 2019-20, it pointed out.
According to the quick estimates, Kerala’s GSDP at constant (2011-12) prices is Rs 5.68 lakh crore in 2019-20 as against the provisional estimate of Rs 5.49 lakh crore in 2018-19, showing a lower growth of 3.46 per cent. However, at current prices, the state's economy is estimated to grow at 8.15 per cent in the financial year ended March 31, 2020. "At current prices, the GSDP is estimated at Rs 8.54 lakh crore (quick estimate) in 2019-20 as against the provisional estimate of Rs 7.90 lakh crore in 2018-19, showing a growth rate of 8.15 per cent," the review said.
In terms of GSVA, the quick estimate at constant (2011-12) prices is Rs 5.01 lakh crore in 2019-20 as against the provisional estimate of Rs 4.89 lakh crore in 2018-19. The growth rate of GSVA is only 2.58 per cent in 2019-20 compared to 6.2 per cent in 2018-19. "However, it may be noted that the average rate of growth for the years 2016-17 to 2019-20 (5.4 per cent) was higher than the average rate of growth for the previous four years, 2012-13 to 2015-16 (4.8 per cent)," the review said.
Adding to the economic woes of low growth rates are the rising prices. "Inflation remained benign during the first half of 2019-20 but exceeded the upper tolerance band around the target during December 2019-February 2020 on the back of rising food price pressures. Inflation, as measured by Consumer Price Index numbers, hovered around 6 per cent to 7 per cent in 2020," it said.