Expert Views: FY13 GDP estimate worst of all growth projections

MUMBAI Thu Feb 7, 2013 12:40pm IST

A labourer walks back to his house after working at a construction site in Chandigarh November 29, 2005. REUTERS/Ajay Verma/Files

A labourer walks back to his house after working at a construction site in Chandigarh November 29, 2005.

Credit: Reuters/Ajay Verma/Files

Related Topics

Priyanka Gandhi Vadra, daughter of Congress party chief Sonia Gandhi, adjusts her flower garlands as she campaigns for her mother during an election meeting at Rae Bareli in Uttar Pradesh April 22, 2014. REUTERS/Pawan Kumar

Election 2014

More than 814 million people — a number larger than the population of Europe — are eligible to vote in the world’s biggest democratic exercise.  Full Coverage 

MUMBAI (Reuters) - India's gross domestic product (GDP) is estimated to grow an annual 5.0 percent in the 2012/13 fiscal year, a government statement said on Thursday, citing provisional estimates.

The latest estimate is the worst of all growth projections issued by the government and the RBI.

(Read main story, click here)

COMMENTARY

SHUBHADA RAO, CHIEF ECONOMIST, YES BANK, MUMBAI:

"The imputed growth for second half FY13 is at 4.7 percent. In our opinion, it is likely to be revised upward.

The main reasons for this considerable slowdown is a sharp correction in services at 6.6 percent, led by trade and finance. The base effect in Q4 is positive, despite which, the numbers are projected lower which implies sharp sequential worsening of economic activity.

We have been anticipating marginal improvement in Q4 on the back of a small pick up in investments."

UPASNA BHARDWAJ, ECONOMIST, ING VYSYA BANK, MUMBAI

"While the slowdown in overall GDP estimates have been widely expected, the slowdown in services, particularly the trade, hotels, transport, communication category has been sharper than anticipated.

Moreover, the sharp slowdown clearly points towards continued slack in consumption demand, which is expected to keep the core inflation under check going forward".

PHANI SEKHAR, FUND MANAGER, ANGEL BROKING, MUMBAI

"It might have small impact but would not impact much as this fiscal year is almost over. People are focusing on next fiscal year.

It'll be interesting to see when actual data comes if there is any structural driver that is lowering GDP numbers and whether rate cuts can prevent that."

A. PRASANNA, ECONOMIST, ICICI SECURITIES PRIMARY DEALERSHIP LTD, MUMBAI

"The estimate seems to be on the lower side. It is surprising that construction sector is estimated to slow sharply in the second half. There is some concern that the drastic slowdown in government spending could affect October-March GDP data.

Even then, I expect this advance estimate to be revised upwards. I think we will end up closer to RBI's estimate of 5.5 percent."

DARIUSZ KOWALCZYK, SENIOR ANALYST, CREDIT AGRICOLE, HONG KONG

"India says FY13 GDP may rise 5 percent, well below the 5.5 percent consensus - this is negative for INR and overall sentiment in India. It may well push the INR OIS and bond yield curves down. Yesterday we closed our long INR position at a 4 percent profit and are waiting for some weakening before re-entering."

RUPA REGE NITSURE, CHIEF ECONOMIST, BANK OF BARODA, MUMBAI

"5 percent GDP growth for the full year is more in tune with reality. The industrial sector downturn has extended beyond anyone's expectation. In the first eight months of the year, for almost six months the manufacturing output has been negative.

Exports have been continuously declining, non-food credit growth is slowing while agricultural sector performance has also been sub-optimal.

After the government started showing a firm resolve to put things in place in mid-September, the series of data that has been released is also reflecting sustained deterioration across various growth indicators."

(Reporting by India treasury and markets teams)

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

RAINFALL THIS YEAR

REUTERS SHOWCASE

Election 2014

Election 2014

Thousands mob Modi as election race starts in Varanasi.  Full Article 

Monsoon Forecast

Monsoon Forecast

Met office rules out surplus monsoon in 2014.  Full Article 

Facebook's Performance

Facebook's Performance

Facebook Q1 revenue grows 72 percent on rising mobile ads.  Full Article 

Earnings Season

Earnings Season

Bharti Infratel Q4 net profit jumps 64 percent.  Full Article 

Solar Dispute

Solar Dispute

Green groups urge U.S. to drop solar trade case against India.  Full Article 

Oil Imports

Oil Imports

India to make May-July oil payments to Iran - sources.  Full Article 

Rice Exports

Rice Exports

India may cede top rice exporter spot under Southeast Asian price onslaught.  Full Article 

Reuters India Mobile

Reuters India Mobile

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