The rate at which a country's total economic output expands or contracts — the most comprehensive single measure of economic cycle direction.
Deeper Explanation
GDP growth is the report card of the economic cycle, though it is a lagging and imprecise measure released weeks after the period it describes. Sustained growth above potential (typically 6-7% for India) generates inflationary pressure and may trigger monetary tightening. Growth below potential creates slack and allows central banks to ease. The composition of GDP growth matters: consumption-led growth is different from investment-led growth, which differs from export-led growth in its sustainability and sensitivity to different economic shocks. For equity investors, GDP growth creates the macro backdrop that lifts (or depresses) corporate earnings across sectors, though company-specific factors dominate over individual business cycles.
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