India: GDP growth accelerates in Q3
November 29, 2013
GDP expanded 4.8% over the same period last year in the July-September period - the second quarter of fiscal year 2013/2014. The reading represents an acceleration compared to the 4.4% increase observed in the first quarter of fiscal year 2013/2014, which had marked the slowest growth rate since Q4 2008/2009. The print came in above market expectations of a 4.6% increase in the economy.
The quarterly print reflected an improvement in all but one sector of the economy. The all-important manufacturing sector rebounded, rising 1.0% in the July-September period (Q1 2013/14: -1.2% year-on-year). The largest increase was registered in the financial services sector, which expanded 10.0% (Q1 2013/14: +8.9% yoy), followed by the increase tallied in electricity, gas and water, with an expansion of 7.7% (Q1 2013/14: +3.7% yoy). The only sector that registered a deterioration over Q1 2013/2014 was the social services sector with an expansion of 4.2%, which was down from the 9.4% expansion tallied in the previous quarter.
The government expects that the economy will grow 5.5% this fiscal year. In addition, the Reserve Bank of India expects GDP growth to reach 5.5% in fiscal year 2013/2014. FocusEconomics Consensus Forecast panelists cut their growth forecast for fiscal year 2013/2014 and now expect GDP to grow 4.8%, which is unchanged from last month's forecast. For fiscal year 2014/2015, the panel sees economic growth at 5.5%, which is down 0.2 percentage points from last month's estimate.
Author: Ricardo Aceves, Senior Economist