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:

Fast-tracking Projects

REUTERS SHOWCASE

Oil Prices

Oil Prices

Oil resumes slide after brief rebound on short-covering.  Full Article 

Space Programme

Space Programme

ISRO tests its heaviest space launch vehicle, eyes global market   Full Article 

Coal India Strike

Coal India Strike

Coal India workers threaten five-day strike, stokes output worries  Full Article 

Gold Discount

Gold Discount

Dealers offer gold discount for first time in five months  Full Article 

Lakhvi Granted Bail

Lakhvi Granted Bail

Pakistan court bails man accused of masterminding Mumbai attack  Full Article 

GST Bill

GST Bill

Cabinet clears bill for nationwide goods and services tax.  Full Article 

Aviation Sector

Aviation Sector

Breakingviews: SpiceJet rescue is no fix for India aviation woes.  Full Article 

Global Economy

Global Economy

Fed confident on U.S. growth, opens door wider to rate hike.  Full Article 

Reuters Poll

Reuters Poll

BSE Sensex to hit 32,980 by December 2015  Full Article 

Reuters India Mobile

Reuters India Mobile

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