A Prasanna, chief economist at ICICI Securities Primary Dealership, spoke to CNBC-TV18 about his views on the first quarter GDP and weak rupee.
“The brokerage house estimate was Q1 GVA (gross value added) around 7.8 percent and Q1 GDP at 8 percent because of a low and favourable base both for manufacturing and industry as well as for some services segment,” said Prasanna.
According to Prasanna, the strong number will be the peak for the quarterly GDP data because going forward it is more likely going to be return to the norm.
“After demonetisation and GST introduction there was slow down and from that the economy recovered, which was witnessed in Q1FY18 and now in Q1 FY19. Some of the momentum could spill over in Q2 but second half (H2), we are likely to return to the norm,” he said.
“The other things one should also watch out for is Gross fixed Capital formation and within GVA one should look at segments like manufacturing. On the services side construction, trade hotels, financials, real estate, insurance etc,” mentioned Prasanna.
With regards to the currency, he said, “The story of rupee depreciation could continue for some time. Rupee depreciation is path of least resistance for the RBI because we have to bring down our current account deficit and exchange rate plays a big role in that.”