GRAPHIC: Tracking GDP numbers

Investments, denoted by gross fixed capital formation, moderately grew by 1.6% in Q1 of FY18, against a contraction of 2.1% in Q4 of FY17

The gross domestic product growth data for the second quarter of FY18, to be released on Thursday, will tell us whether the goods and services tax (GST) roll-out has dented investment and demand in the economy. Investments, denoted by gross fixed capital formation, moderately grew by 1.6 per cent in Q1 of FY18, against a contraction of 2.1 per cent in Q4 of FY17. However, growth in Q1 of FY18 was even lower than that of Q3FY17, the period of demonetisation (see chart). Growth in demand, indicated by private final consumption expenditure, was high during the period of demonetisation, as people must have spent cash on purchases. Thereafter, it declined to 7.3 per cent in Q4 of FY17, from 11.1 per cent in the previous quarter. Q1 of FY18 saw it further declining to 6.6 per cent.