India: GDP accelerates a notch but remains lacklustre
September 10, 2012
In the April-June period - the first quarter of the fiscal year 2012/13 - GDP increased 5.5% over the same period last year. The reading came in slightly above the 5.3% expansion observed in the previous quarter and matched last month's FocusEconomics Consensus Forecast. The acceleration over the previous quarter was mainly driven by a rebound in the manufacturing sector, which recovered from a 0.3% contraction in the previous quarter to a 0.2% expansion in Q1. Meanwhile, construction output recorded the strongest growth rate, increasing 10.9%, and finally, the important agricultural sector expanded 2.9%, an acceleration over the 1.7% expansion observed in Q4. On the other hand, the trade, hotels, transport and communication sector - which represents over a quarter of the overall economy - slowed down to a 4.0% expansion (Q4 2011/12: +7.0% yoy). The Central Bank expects GDP growth to reach 6.5% this fiscal year, which will end in March 2013, while the government sees the economy expanding 7.6%.