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

BANGALORE Wed Nov 28, 2012 9:21am 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

Related Topics

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

Markets

REUTERS SHOWCASE

Segway in India

Segway in India

Segway’s India business pegs hope on tech-savvy Modi  Full Article 

Power Outage

Power Outage

Mumbai hit by power cuts  Full Article 

Commodities

Commodities

Gold imports, premiums to jump on festive demand - top refiner  Full Article 

Economic Worries

Economic Worries

Pakistan's promises to IMF in doubt as protests sap economy   Full Article 

Islamic Finance

Islamic Finance

Basel III deposit challenge looms over Islamic banks   Full Article 

Antitrust Probes

Antitrust Probes

U.S. business lobby says concerned China antitrust probes unfair.  Full Article 

Reuters India Mobile

Reuters India Mobile

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