• The Indian economy (Production, at factor cost) grew by only 4.4% over the year to the June quarter, 2013. This is the slowest pace of growth since March 2009.
• By Production, services (primarily financial and agriculture) were the mainstay; in contrast, mining and manufacturing contracted.
• Consumption (primarily Government) and Investment were the main contributors to GDP by Expenditure. Net exports and Gross fixed capital formation deducted from growth.
• The recent trade numbers for July were encouraging, with a 11.6% expansion in exports and a compression in the trade deficit. Such estimates need to be sustained, and should receive support from the fall in the real exchange rate.
• The Indian Rupee remains weak and volatile and reflects the general pattern of deteriorating EM currencies among countries with high Current Account Deficits, such as India’s (4.8% of GDP).
• Recent RBI measures to open a Foreign Exchange Swap facility to assist oil marketing companies have eased pressure in currency markets.
• The Finance Minister, Panaliappan Chidambaram, has outlined a 10-point agenda to improveIndia’s economic prospects. These are very useful measures, but need to be acted on urgently.
• Standard & Poor’s negative outlook onIndiais a reminder of the need to proceed with reforms.
• NAB Economics has a modest outlook on India: 4.4% in 2013, followed by a slightly higher 4.6% in 2013. Business and consumer caution, stressed balance sheets as well as limited support from future Government spending will weigh on growth prospects. The silver lining is the favourable monsoon.

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• India GDP (June Quarter) – September 2013 (PDF 509 KB)