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India’s Q4 GDP seen expanding at 7.6% on continued strength in services, manufacturing
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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Summary
India’s economic growth likely gained momentum in the fourth quarter of last year, supported by continued strength in the services industry and an expanding manufacturing sector, says a report by SBI Ecowrap. The report expects gross domestic product (GDP) growth at about 7.6% in the three months ended March 31 while the fiscal 2018 growth would …
India’s economic growth likely gained momentum in the fourth quarter of last year, supported by continued strength in the services industry and an expanding manufacturing sector, says a report by SBI Ecowrap.
The report expects gross domestic product (GDP) growth at about 7.6% in the three months ended March 31 while the fiscal 2018 growth would be at 6.7%.
Asia’s third-largest economy grew at 7.2 percent in the December quarter, its fastest in five quarters, according to the government data. Meanwhile, China’s economy grew at 6.8% in the quarter ended March 31.
If the forecast proves right, the January-March 2018 growth figures would be the highest since demonetisation in November 2016 and goods and services tax rollout in July 2017.
India’s manufacturers and service industries have been struggling to overcome disruptions from the bumpy launch of a national sales tax last year.
SBI Ecowrap expects 9% growth in manufacturing in the fourth-quarter and believes service sector growth will hold up in excess of 8%.
The service sector plays a crucial role in India’s economy as it contributes about 60% to the country’s gross domestic product.
According to the report, corporate revenue trends, which track industry gross value-added (GVA) growth closely, rebounded in the second-quarter and exhibited positive growth of 16.1% in the last quarter.
SBI Ecowrap’s composite leading indicator index (CLI) – a basket of 18 leading indicators to find out the early signals of turning-points in economic activity – witnessed a sharp jump in the December quarter.
“Our estimate indicate that the CLI index is moving in an upward direction in the fourth-quarter of fiscal 2018 signaling that the economic activity is picking up,” the report said.
GDP data will be released on Thursday at 5.30 pm. Economic affairs secretary Subhash Chandra Garg said on Monday it was expected that annual growth was between 7.3 and 7.5% in the March quarter.
With growth proving robust and prices on the rise, the Reserve Bank of India may change its policy stance next week but the report states otherwise.
“…a higher than expected GDP growth for India should not propel us into a false delusion of an impending rate hike cycle.”
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