Below trend growth to continue
Insight
September 4, 2014
India GDP (June Quarter) – September 2014
The Indian economy expanded by 5.7% in the June quarter, the fastest pace in over 2 years. By sector, Services (Financial & Community services) and Industry were better performing, while Agriculture eased due to weaker monsoon conditions.
- The Indian economy expanded by 5.7% in the June quarter, the fastest pace in over 2 years.
- By sector, Services (Financial & Community services) and Industry were better performing, while Agriculture eased due to weaker monsoon conditions.
- The improvement in Industry was welcomed as it marked a return to growth for the previously beleaguered manufacturing and mining sectors.
- By Expenditure, Consumption, Net Exports and Investment were the main contributors to growth.
- India’s current account deficit remained well contained at 1.7% of GDP, assisted by improvements in the trade balance.
- Volatility has abated in both the foreign exchange and equity markets.
- We’ve maintained our forecasts of 5.2% in 2014 and 5.8% in 2015, with an upside bias.
- Leading indicators point to an improvement in growth. Besides, there’s been progress made in clearing stalled investment projects.
- Near term risks include the decision of the Supreme Court with regard to the allocation of the coal blocks and the extent of the monsoon deficiency.
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