TABLE-India’s economic growth slows to 7 pct in June quarter

31 Aug 2015 | Author: | No comments yet »

India’s Economic Growth Slows.

India’s economic growth slowed to a lower-than-expected 7 percent in the three months through June from 7.5 percent in the previous quarter, government data showed on Monday. “The 7 percent number will get better in the next few quarters on the back of expected government expenditure and consumption demand because of lower inflation on anticipated rate cuts by the RBI. “GDP data is clearly showing that growth has not accelerated much and also the difference between the nominal data and the yearly data is suggesting that there is a very low inflationary situation. “GDP growth this year will be led by consumption growth (backed by falling inflation and monetary easing), investment growth revival will take place once capacity utilisation starts increasing. “The main reason for GVA to be higher than expected is due to the surprise agriculture growth.

NEW DELHI—India’s economic expansion decelerated to 7% year-over-year in the quarter ended June 30, highlighting the challenges Asia’s third-largest economy faces as it tries to gain momentum. The growth in gross domestic product was slower than the preceding quarter’s 7.5% expansion and weaker than the 7.4% average forecast by economists polled by The Wall Street Journal. But the GDP data remain inconsistent with numerous other indicators which suggest that, at best, the economy is in the early stages of recovery after three years of tepid growth. “For now the key point is that they remain inconsistent with a number of other activity indicators that point to a slowdown in the economy over much of the past three years, and only a modest improvement more recently.” “Certain sub-sectors have expanded quite sharply, consistent with the pick-up in manufacturing activity. The GDP deflation seems to indicate a level of inflation that is much lower than the inflation we have seen in the last few years, so that projects a much higher real rate of growth. “There’s a lot of emphasis that’s being put on the opportunities that lie ahead for India and not too much attention is being paid to the challenges that remain today. “From the looks of it, it seems to be suggesting a further deceleration from last quarter, which in our view clearly paves the way for two more repo rate cuts before the close of the financial year.” “We expect RBI to cut interest rates by 25 basis points in September as global growth concerns still continue and India is importing low inflation thanks to easing commodity prices.”

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