India’s GDP expands 8.4% in July-September quarter, beats estimates
India’s gross domestic product (GDP) grew 8.4 percent in the July-September quarter, official data released on Tuesday showed. That reading was better than GDP expansion of 8.1 percent predicted by economists in a CNBC-TV18 poll. The country’s GDP had expanded 20.1 percent in the April-June period. (Read more on India’s GDP data)
Here are some reactions:
Suvodeep Rakshit, Senior Economist, Kotak Institutional Equities:
“2QFY22 real GDP growth was in line with consensus expectations. A large part of the growth upside was driven by segments such as public administration, education and health, which saw a sharp increase in momentum as well as a favorable base effect. Overall, the sharp uptick from the second wave was visible across all segments. Investment growth remained strong even when compared to 2QFY20 (pre-Covid) levels. Growth should remain fairly well supported in 3QFY22 too on account of festive season and opening up of services sector too. Growth remains well on track for a full year growth of around 9.5 percent. The growth numbers will unlikely play a differentiating factor for the RBI’s policy with its own estimate being at 7.9 percent.”
“With a new Covid variant starting to spread globally and uncertainty on its impact on the economic scenario, the RBI would possibly wait for some more clarity before moving decisively on the rates. We maintain our call for a reverse repo rate hike in February with the December meeting remaining a close call.”
Nikhil Gupta, Chief Economist at Motilal Oswal Financial Services:
“India’s real GDP growth was marginally better than our forecast. A comparison of India vis-a-vis other major nations reveals that while 3QCY21 growth is the highest in India, it is right in the middle – almost flat – on 2-yr CAGR basis. GDP details suggest that while private consumption grew slowly than expected, investments grew slightly higher.”
“From GVA perspective, while farm, construction and public administration and defense services (PADS) grew faster than expected, it was partly offset by weak manufacturing sector. The sharp improvements in the farm and PADS sectors were the surprise in today’s release, which pushed real GVA growth higher than expected… Nevertheless, the broad story remains intact. With weak household sector, consumption may continue to lag. Accordingly, we believe that real GDP growth could be 5-5.5 percent in 2HFY22, implying full-year FY22 growth of around nine percent or just one percent higher than in FY20.”
Sandeep Bagla, CEO,TRUST Mutual Fund:
“The GDP growth was in line with expectations. One surprise was the lower growth in manufacturing sector. It seems to suggest that the output gap is not narrowing as swiftly. The MPC meeting in December will have to consider the growth in GDP as well as the possibility of slowdown due to the new virus strain.”
Vikash Khandelwal, CEO, Eqaro Guarantees:
“We saw economic activity returning back to normalcy after the second wave of the pandemic. This is the fourth consecutive quarter of positive growth after a two-quarter de-growth witnessed last year. The result of the government spending is visible in the contribution of the real estate and construction sector to the growth… I hope the RBI continues to support growth with its accommodative policy even though there is a threat of inflation derailing the trajectory.”
