Below trend growth to continue
Insight
December 5, 2014
India GDP (September Quarter) – December 2014
The Indian economy expanded by 5.3% over the year to the September quarter. It's the second successive quarter of above-5% growth, and reflects a gradual upturn in the Indian economy. Financial services and Community services were the best performing sectors.
- The Indian economy expanded by 5.3% over the year to the September quarter.
- While lower than the June quarter’s (5.7%) result, it’s the second successive quarter of above-5% growth, and reflects a gradual upturn in the Indian economy.
- Financial services and Community services were the best performing sectors, while manufacturing was tepid.
- NAB Economics is forecasting a 5.3% real GDP outcome in 2014, followed by a quicker 6.3% expansion in 2015.
- The RBI held its policy rate at 8%, despite a deceleration in the inflation rate (driven partly by lower oil prices) and weak industrial production.
- NAB Economics is forecasting 75bps worth of cuts in the policy rate during 2015, bringing the Repo rate down to 7.25% by the end of 2015.
- Financial market indicators such as interest rate swaps and the yield curve are also pricing in cuts during 2015.
- Risks to our interest rate projections include limited progress on fiscal consolidation, a weak monsoon and possible re-emergence of higher fuel & commodity prices.
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