India GDP


India: Economy slows

November 28, 2014

India’s economy decelerated in the second quarter of fiscal year 2014/2015, raising doubts about the government’s ability to revive the economy. GDP increased 5.3% in the July-September period over the same quarter last year, which marked a slight deceleration over the 5.7% expansion registered in the previous three-month period. Growth was modestly above the 5.1% growth rate the market had expected.

The quarterly slowdown reflected that growth in the all-important manufacturing sector was virtually stagnant, marking a notable deterioration over the 3.5% increase observed in the April-June period. Agriculture slowed from a 3.8% increase in Q1 FY 2014/2015 to a 3.2% rise in Q2 FY2014/2015 as a result of a weak farming harvest due to a bad monsoon. Meanwhile, the production of electricity, gas and supply of water grew 8.7% in Q2, below the 10.2% rise tallied in Q1.

The government expects growth between 5.4% and 5.9% in FY 2014/15. Meanwhile, the Reserve Bank of India expects growth to increase to between 5.0% and 6.0% in fiscal year 2014/2015. Forecasters polled by FocusEconomics expect GDP to grow 5.3% in fiscal year 2014/2015, which is unchanged from last month’s forecast. For fiscal year 2015/2016, the panel sees economic growth at 6.1%.

Author:, Senior Economist

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India GDP Chart

India GDP Q3 2014

Note: Year-on-year changes of GDP in %.
Source: Ministry of Statistics and Programme Implementation (MOSPI) and FocusEconomics Consensus Forecast.

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