Expert views on December quarter GDP

MUMBAI Fri Feb 28, 2014 5:56pm IST

An employee works inside a electrical equipments manufacturing unit in New Delhi December 2, 2013. REUTERS/Anindito Mukherjee/Files

An employee works inside a electrical equipments manufacturing unit in New Delhi December 2, 2013.

Credit: Reuters/Anindito Mukherjee/Files

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MUMBAI (Reuters) - India's economy grew a slower-than-expected 4.7 percent in the three months through December, dragged down by a contraction in manufacturing and mining, according to data on Friday.

Analysts polled by Reuters had forecast growth of 4.9 percent.

COMMENTARY

SUJAN HAJRA, CHIEF ECONOMIST AT ANAND RATHI, MUMBAI

"This does not give much confidence to the outlook for the economy. This is disappointing, but in line with the trend for the past several quarters.

Achieving 4.9 percent for the full year looks challenging. While some improvement in segments like agriculture, mining and electricity is visible, the situation in manufacturing and many segments of services remains subdued.

The overall picture doesn't change, only deteriorates marginally. All the more, it becomes more difficult to tighten monetary policy more in the next six months."

ANUBHUTI SAHAY, ECONOMIST AT STANDARD CHARTERED BANK, MUMBAI

"The headline GDP is marginally lower than our expectation. The growth in the services sector is a positive surprise, but whether it will be replicated in the fourth quarter is the question.

We expect it to slow down a bit in the fourth quarter as government expenditure had significantly slowed down in order to meet its fiscal deficit target.

Agriculture and industry have both disappointed. With this kind of third quarter numbers, the overall growth for the year looks likely to average around 4.6 percent. If the government's advance estimate of 5 percent full year growth is to be met, the economy will have to grow at 6 percent in the fourth quarter, which looks very difficult.

The broader picture remains that growth continues to be on a weak footing and a sustained improvement in the industrial sector is necessary to help bring about a significant change in the growth trajectory."

(Reporting by Mumbai markets team; Editing by Rafael Nam)

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