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GDP Data Today, India Could Top China's Growth Rate: 10 Points

GDP growth had fallen to a three-year low of 5.7 per cent in the April-June quarter due to destocking in the run-up to the July 1 launch of the goods and services tax (GST) and a lingering impact of demonetisation.

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GDP Data Today, India Could Top China's Growth Rate: 10 Points

The government is likely to release the GDP data on Wednesday at 5:30 pm

GDP or gross domestic product grew at 6.9 per cent in the October-December quarter from a year earlier as the transient effects of GST fade away, according to a Reuters poll of more than 35 economists, taken over the past week. If the GDP growth numbers come in line with the Reuters poll, it will be the best growth rate recorded in a year. It would also help India regain the status of the world's fastest-growing major economy. The government is likely to release the GDP data at 5:30 pm on Wednesday, February 28.
Here are 10 things to watch out for in today's GDP data:
  1. If there was 6.9 per cent growth, that would top China's 6.8 per cent annual pace for October-December. The last time the economy had a faster growth rate was in the final three months of 2016.
  2. A slowdown mainly in the agricultural sector is likely to be compensated by a higher growth rate expected in industrial sector and services, says Abheek Barua, chief economist of HDFC Bank.
  3. "An expected strong rebound in the industrial sector, particularly manufacturing, as the transient effects of GST fades away, corroborates well with improvement in corporate earnings and other fast moving indicators such as IIP and PMI for the third quarter," he said.
  4. Mr Barua remains "optimistic about the growth outlook in FY19 as the economic recovery gains momentum and the effects of the demonetisation shock and GST related disruptions fade away".
  5. GDP growth had fallen to a three-year low of 5.7 per cent in the April-June quarter due to destocking in the run-up to the July 1 launch of the goods and services tax (GST) and a lingering impact of demonetisation. But in the July-September quarter, the economic growth picked up to 6.3 per cent annually, a return to a faster growth trajectory after five consecutive quarters of slowdown.
  6. The Economic Survey says a series of major reforms undertaken over the past year will allow real GDP growth to rise to between 7.0 per cent and 7.5 per cent in 2018-19, thereby reinstating India as the world's fastest growing major economy.
  7. The International Monetary Fund projects India's GDP to grow at 7.4 per cent in 2018 as against China's 6.8 per cent, making it the fastest growing country among emerging economies following last year's slowdown due to demonetisation and the implementation of the GST.
  8. The IMF's update, released last month, projects a 7.8 per cent growth rate for India in 2019.
  9. Some economists are however concerned about the non-performing assets of state-run banks, and say if they are not handled effectively it would hurt economic activity.
  10. Adding to those worries, Punjab National Bank (PNB), the second biggest state-run lender in the country, this month revealed a loan fraud that's the biggest in India's banking history. The fraud has cast a shadow over the workings of state-run lenders, already reeling from accumulated bad loans that are higher than those of banks in most major economies.


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Highlights

1
Government likely to release GDP data at 5:30 pm on Wednesday
2
GDP growth seen at 6.9% in December quarter, says a Reuters poll
3
Numbers in line with Reuters poll will mean best growth rate in a year

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