India Jul-Sep GDP growth seen at 6.8% vs 7.8% Apr-Jun
Informist, Friday, Nov 24, 2023
By Shubham Rana
NEW DELHI – India's GDP growth is likely to have eased to 6.8% in the September quarter from a four-quarter high of 7.8% in Apr-Jun, as the statistical effect of a low base normalises, according to a poll of 21 economists by Informist. India's GDP grew 6.2% in Jul-Sep last year, and 7.2% in the year ended March.
According to the poll, growth in gross value added in Jul-Sep is also seen falling to 6.8% from 7.8% a quarter ago.
The National Statistical Office is scheduled to release GDP data for the quarter ended September at 1730 IST on Nov 30.
Even as GDP growth is seen easing from the previous quarter, economists expect the underlying growth trends to have been robust during Jul-Sep, led by the services sector and high capital expenditure by the central and state governments. At the projected 6.8%, GDP growth in Jul-Sep would be 30 basis points higher than the Reserve Bank of India's projection for the quarter.
The S&P Global services purchasing managers' index averaged 61.6 in Jul-Sep, higher than 55.7 in the corresponding period of last year and 60.6 in Apr-Jun. Services exports in the quarter ended September were at $83.38 bln, up 8.7% from Jul-Sep 2022.
"Underlying growth trends continue to look robust in India, with activity underpinned by domestic consumption, high levels of state-led capex, and strong growth in the utilities sectors," Barclays said in a report.
The Centre's capital expenditure during Jul-Sep rose 26.4% from the year-ago period. Capital spending by states has also picked up this year.
Industrial growth is also expected to have picked up in the quarter ended September, economists said. The Index of Industrial Production rose 6.0% in Jul-Sep from 4.5% in Apr-Jun, while India's manufacturing PMI averaged 57.9 in Jul-Sep, unchanged from Apr-Jun, and higher than 55.9 in Jul-Sep.
"High-frequency data suggests that the momentum of construction activity remained healthy in Q2 FY2024 (Jul-Sep), with the sub-par rainfall resulting in relatively lower disruptions in the quarter vis--vis what was typically seen in the past," ICRA said in a report.
Growth in the agriculture sector is seen subdued, with economists expecting agriculture GVA growth to be in the range of 2.0-3% in Jul-Sep, the least in at least four quarters, due to a lower-than-normal monsoon.
Following are the estimates of respondents on GDP growth in Jul-Sep: