India's July-Sept GDP growth seen at 5.4 percent

BANGALORE Tue Nov 27, 2012 6:43pm IST

1 of 2. A worker works next to the assembly line of the Hyundai Motor India Ltd. plant at Kancheepuram district in Tamil Nadu October 4, 2012.

Credit: Reuters/Babu

BANGALORE (Reuters) - India's economy probably expanded near its slowest pace in three years in the quarter to September, according to a Reuters poll, suggesting little signs of an early turnaround, despite reform steps taken by the government to lure back investors.

Gross domestic product rose 5.4 percent year-on-year in the July-September period, slightly lower than the 5.5 percent increase in the previous quarter, and only just above the three-year low of 5.3 percent in the quarter to end-March, the median consensus of 39 consensus showed.

Forecasts ranged from 5.0 percent to 6.2 percent.

Asia's third-largest economy is growing faster than many other countries, but the pace is way below the 9 percent growth that the government has targeted to provide jobs for a booming young population.

Data on factory activity showed slowing global demand hurt exports and falling investments weighed on the manufacturing sector, which has been the biggest drag on overall growth in the quarter to September.

"There have been no signs of an upturn in India," said Andrew Kenningham, chief economist at Capital Economics.

"Available data on industrial production and the PMIs point to little change in growth, while exports have been even weaker in the quarter to September. Overall, therefore, a small further decline in growth rate is most likely."

The government has launched a slew of initiatives to boost growth, including raising subsidised diesel prices and opening sectors like supermarkets to foreign players.

However, it has since struggled to enforce the reforms and failed to break a deadlock in parliament over opening up the retail sector.

"The relaxation of restrictions on inward investment will have no impact this year, and probably minimal impact in 2013," said Kenningham.

The central bank has so far rebuffed calls for interest rate cuts, saying prices are still rising too fast to risk loosening policy much, and it also wants the government to bring down a worryingly high fiscal deficit.

The next monetary policy review is due in December.

(Polling and analysis by Shaloo Srivastava; Editing by Sanjeev Miglani)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Popularity Poll

REUTERS SHOWCASE

Record Highs

Record Highs

Nifty touches record high; software stocks gain.  Full Article 

New Adviser

New Adviser

Arvind Subramanian likely to be chief econ adviser.  Full Article 

Pricing Mechanism

Pricing Mechanism

Govt sets up a four-member panel to re-examine gas pricing.  Full Article 

Royalty Rates

Royalty Rates

India to hike iron ore royalty, miners may struggle to pass on extra cost.  Full Article 

Diesel Deregulation

Diesel Deregulation

Oil ministry to seek Cabinet nod on diesel deregulation - sources  Full Article 

Commodities

Commodities

Gold near two-month low; set for weekly drop on interest rate fears  Full Article 

Reuters Exclusive

Reuters Exclusive

Apple iPhone 6 screen snag leaves supply chain scrambling   Full Article 

Helping Regional Mills

Helping Regional Mills

Govt raises sugar import duty to 25 pct from 15 pct.  Full Article 

Curbing Risks

Curbing Risks

RBI to lower ceiling on bank loans to a single corporate group.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage