The 6.5% GDP growth and the economic mess: What does this mean for the media?

01 Jun,2012

Ashish Pherwani

By A Correspondent

 

The front pages of the business papers express shock. With reason. The 5.3 percent GDP growth rate for the fourth quarter of 2011-12 is the lowest since 2003 and the full-year growth of 2011-12 of 6.5% is lower than the 6.7% of 2008-09.

 

So what does this mean for the media? Should we press the panic button? When asked whether the GDP growth numbers and the prevailing economic situation in the country will impact the media, Ashish Pherwani, Associate Director, Ernst & Young said: ” I think it’s normally the other way round. The media is at least one quarter ahead in terms of the impact. So it’s been a couple of quarters since media effective rate has been falling or has stayed flat, volume growth has also not been great. So that’s like an early warning signal which comes always a quarter before actual numbers start going down at a national level. To answer the question more specifically, media has already reacted to it so hopefully there won’t be any further reactions.”

 

MxMIndia spoke to some mediapersons and economists for hints on the shape of things to come. While many are still hoping that it will not impact them, those who have experienced 2008-09 believe there is no need to panic as the government is now seized of the situation. Big ticket announcements will not get stalled, so if there’s a new show that is going to be announced on a GEC or a rejig expected on a channel or a newspaper, that will continue. And must continue.

 

However, there will be caution everywhere. Media entities depending much on real estate and the financial sector need to be alert, but with the government sure to act to improve things, there is a feeling that the crunch (from the realty sector) will not last beyond six months as the government will prop it up.

 

Meanwhile, the sentiments will indeed be weak. And marketers known to splurge will take a backseat as stakeholders will be more demanding.

 

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