gross domestic product Current Affairs - 2019
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A study by the global investment banking, securities and investment management firm, Goldman Sachs has stated that Brexit has cost Britain nearly 2.5% of GDP.
Findings of the Study
- Britain’s economy has lost nearly 2.5 per cent of GDP relative to its growth path prior to the mid-2016 referendum on exiting the European Union (EU) and has lagged other advanced economies as uncertainty dents investment.
- Policy makers in the UK are still struggling to chalk out the Brexit modalities. The resulting uncertainty over the future political and economic relations with the EU has resulted in real costs for the UK economy and has a spillover effect on other economies.
- Brexit uncertainty has been a major driver of economic output losses as they are concentrated in investment.
- Goldman Sachs predicts that the Brexit cost stood at around 600 million pounds ($785 million) per week since the referendum.
- Further, in a no-deal Brexit scenario it predicts a 15 per cent chance of, Britain witnessing output losses with a ”substantial” global confidence shock marked by sharp sterling depreciation.
The study notes that the Brexit will have spillover effects and European countries would be most exposed to this scenario and estimates an output loss of around 1 per cent of real GDP.
India’s fiscal deficit stood at 134.2% of the full-year revised budgeted estimate at the end of February 2019. This humungous level of fiscal deficit is attributed to the tepid growth in revenue collections.
The fiscal deficit for April-February 2018-19 stood at Rs 8.51 lakh crore against the revised estimate (RE) of Rs 6.34 trillion for the entire year. The government has stated that it is committed to restricting the fiscal deficit at 3.4% of the Gross Domestic Product (GDP) as envisaged in the Budget.
The receipts of the government stood at Rs 12.65 trillion which is 73.2% of the revised budgetary estimate (BE) and the expenditure incurred by the government stood at Rs 21.88 trillion.
The tax revenue of the government stood at Rs 10.94 trillion and non-tax revenue was Rs 1.7 trillion.
Out of the Rs 21.88 trillion expenditure of government, Rs 19.15 trillion was on revenue account and Rs 2.73 trillion on capital account.
Of the total revenue expenditure, Rs 5.01 trillion was on account of interest payments and Rs 2.63 trillion on major subsidies. The government has also transferred Rs 5.96 lakh crore to the state governments as devolution of a share of taxes by the central government.