Explaining GDP data: GST de-stocking not sole cause of slowdown

Expenditure side of GDP data shows rather than contracting, 'change in stocks' grew by 1.2% in Q1

Inventories grew by 1.2 per cent in the first quarter of 2017-18, countering claims that the slowdown in economic growth during the quarter was caused by de-stocking in anticipation of the rollout of the goods and service tax (GST) from July 1.

An economic revival in the second quarter was expected because stocks were likely to be restored to normal levels as the GST progressed, Chief Statistician of India TCA Anant had said. 

But the expenditure side of the GDP data shows rather than contracting, ‘change in stocks’ grew by 1.2 per cent in the first quarter. Change in stocks, which reflects