GDP QUARTERLY. November 29, Sutapa Roy

Transcription

1 GDP QUARTERLY November 29, 2013 Sutapa Roy

2 Quarterly GDP (Q2 of FY ) India s GDP grew at the rate of 4.8 percent in Q2 of FY from a year earlier, after expanding by 4.4 percent YoY in Q1 of FY India s Q2 (July-September) FY GDP (Gross Domestic Product) growth accelerated to 4.8 percent YoY, helped by a sharp uptick in Agricultural production and a mild recovery in Industrial sector. The number was better than the 4.4 percent YoY growth registered in Q1 of FY , however, remained below the 5 percent mark for the fourth consecutive quarter. During the quarter, Agricultural growth picked up to 4.6 percent YoY on account of an above normal monsoon. Industry growth accelerated to 2.4 percent YoY against 0.2 percent in the previous quarter, due to an improvement in core sectors growth. However, growth in Services sector moderated sharply to 5.9 percent YoY against 6.6 percent YoY registered in Q1 of FY , attributed by lower consumption demand as well as government expenditure. However, on expenditure side, India s GDP grew by 5.6 percent in Q2 of FY from a year earlier, after increasing by 2.4 percent in the previous quarter, led by robust Exports performance. In absolute terms, at constant ( ) prices, GDP for Q2 of FY increased to INR13.68 lakh crore vis-à-vis INR13.05 crore during the same quarter of FY In current prices, GDP was calculated at INR25.05 lakh crore against INR22.28 crore in Q2 of FY , showing a growth of 12.4 percent. Exhibit 1: GDP Growth Trend Outlook: Without any sign of recovery in Service sector, it may be a hard task to achieve a growth rate of above 5 percent. However, India has received a plenty of rain from this year s monsoon, so Agricultural production along with a strong Exports is likely to support GDP growth. A bumper agricultural production is also expected to encourage rural consumption and thereby help in Industrial recovery particularly in FMCG sector. Overall, we continue to expect GDP growth of 4.8 percent YoY for FY Agricultural sector grew by 4.6 percent YoY in Q2 of FY vis-à-vis a growth of 2.7 percent YoY in Q1 of FY Agricultural Sector Above-normal monsoon lifted Agricultural growth to 4.6 percent YoY in the quarter ended September 2013 vis-à-vis a growth of 2.7 percent YoY registered in Q1 of FY According to the First Advance Estimates of Production of Foodgrains, Oilseeds and other Commercial Crops for released by the Department of Agriculture and Cooperation, - 2 -

3 production of coarse cereals, pulses and oilseeds are expected to grow by 4.9 percent YoY, 1.9 percent YoY and 14.9 percent YoY respectively, during the Kharif season of Exhibit 2: Growth trend in Agricultural Sector Manufacturing production grew by 1.0 percent YoY in Q2 of FY vis-àvis a decline of 1.2 percent YoY registered in Q1 of FY Industry Industry growth accelerated to 2.4 percent YoY in Q2 of FY against 0.2 percent in the previous quarter, due to an improvement in core sectors growth. Production of Manufacturing sector increased by 1.0 percent YoY against a decline of 1.2 percent YoY registered in Q1 of FY Other than that, production of Mining sectors registered degrowth of 0.4 percent YoY against -2.8 percent YoY registered in Q1 of FY Electricity production grew by 7.7 percent YoY compared with a growth rate of 3.7 percent YoY in Q1 of FY Growth in Construction sector came in at 4.3 percent YoY during Q2 against 2.8 percent YoY in Q1 of FY The key indicators of Construction sector, namely, production of cement and consumption of finished steel registered growth rates of 5.9 percent YoY and 1.3 percent YoY, respectively in Q2 of FY Exhibit 3: Industry Growth Trends - 3 -

4 Trade, Hotels, Transport and Communication grew by 4.0 percent YoY during Q2 of FY compared with 3.9 percent YoY in Q1 of FY Services Growth in Services sector moderated sharply to 5.9 percent YoY against 6.6 percent YoY registered in Q1 of FY , attributed by lower consumption demand as well as government expenditure. In Services sector, growth rate of Trade, Hotels, Transport and Communication came in at 4.0 percent YoY compared with 3.9 percent YoY in Q1 of FY Among the sectors, key indicators of railways, namely, the net tone kilometers and passenger kilometers have shown growth rates of 3.7 percent YoY and -2.5 percent YoY, respectively in Q2 of FY In the Transport sector, the sale of commercial vehicles, cargo handled at major ports, cargo handled by the civil aviation and passengers handled by the civil aviation registered growth rates of percent YoY, 5.9 percent YoY, 0.4 percent YoY and 12.6 percent YoY, respectively in Q2 of FY Financing, Insurance, Real Estate and Business Services has shown a steady growth in Q2. The sector grew by 10.0 percent YoY during the quarter against 8.9 percent YoY in the previous quarter. Among the sectors, the key indicators, namely, aggregate bank deposits, and bank credits have shown growth rates of 12.0 percent YoY and 15.4 percent YoY, respectively as on September 20, FY Community, Social and Personal services grew by 4.2 percent YoY vis-à-vis a growth of 9.4 percent YoY in Q1 of FY Exhibit 4: Services Growth Trends Exhibit 5: Percentage Trend in GDP Growth Particular FY13-14 FY13-14 FY12-13 FY12-13 FY12-13 Q2 Q1 Q4 Q3 Q2 GDP Agriculture Mining Manufacturing Electricity Construction Trade,Hotels,Transport and Communication Financing,Ins,Real Est and Bus Services Community, Social and Personal Services

5 GDP Growth by Expenditure On the expenditure side, India s GDP grew by 5.6 percent YoY in Q2 of FY , on account of a robust Exports performance. Growth rate was 2.4 percent YoY in Q1 of FY Gross Fixed Capital Formation (GFCF) (Fixed Investment) registered a growth of 2.6 percent YoY in Q2 against de-growth of 1.2 percent YoY in the previous quarter. Private Final Consumption Expenditure (PFCE) grew by 2.2 percent YoY in Q2 of FY against 1.6 percent YoY in Q1 of FY Government Final Consumption Expenditure (GFCE) growth declined by 1.1 percent YoY in Q2 of FY against a growth of 10.5 percent YoY registered in Q1, on account of a sharp cut back in Government spending. During the quarter Exports grew by a staggering 16.3 percent YoY, benefitting from improving global demand and a depreciated rupee. Exhibit 6: PFCE, GFCE & Investment Growth Trend Exhibit 7: Percentage Trend in GDP Growth by Expenditure (at market prices) Particular FY13-14 FY13-14 FY12-13 FY12-13 Q2 Q1 Q4 Q3 GDP at market prices Private Final Consumption Expenditure (PFCE) Government Final Consumption Expenditure (GFCE) Gross Fixed Capital Formation (GFCF) Exports

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