February 7, 2013 / 5:52 AM / 4 years ago

Expert Views: FY13 GDP estimate worst of all growth projections

4 Min Read

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

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)


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."


"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."


"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

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below