India's GDP growth recovers to 6.3% in second quarter of FY18

Indian economy has shaken off the effects of demonetisation and GST rollout as the India’s GDP growth surged by 6.3% in the September quarter. India’s economic growth had slowed to 5.7% in the June quarter.

The Central Statistics Office (CSO) on Thursday released the estimates of Gross Domestic Product (GDP) for the second quarter (July-September) Q2 of 2017-18, both at constant (2011-12) and current prices, along with the corresponding quarterly estimates of expenditure components of the GDP.
 
The CSO report said, "GDP at constant (2011-12) prices in Q2 of 2017-18  is estimated at Rs 31.66 lakh crore, as against Rs 29.79 lakh crore in Q2 of 2016-17, showing a growth rate of 6.3 percent. Quarterly GVA at Basic Price at constant (2011-12) prices for Q2 of 2017-18 is estimated at Rs 29.18 lakh crore, as against Rs 27.51 lakh crore in Q2 of 2016-17, showing a growth rate of 6.1 percent over the corresponding quarter of previous year."
 
"The economic activities which registered growth of over 6.0 percent in Q2 of  2017-18 over Q2 of 2016-17 are ‘manufacturing’, ‘electricity, gas, water supply & other utility services and ‘trade, hotels, transport & communication and services related to broadcasting’," it further said. 

"The growth in the ‘agriculture, forestry and fishing’, ‘mining and quarrying’, ‘construction’ 'financial, insurance, real estate and professional services' and ‘Public administration, defence & other services’ is estimated to be 1.7 percent, 5.5 percent, 2.6 per cent, 5.7 percent  and 6.0 percent respectively, during this period," the data released by the Union Ministry of Statistics said. 

Terming the economic growth in line with expectations, Sumedh Deorukhkar, senior economist, BBVA, Hong Kong, told Reuters, "The latest growth outturn is in line with RBI`s recent rhetoric and thus shouldn`t move the needle on interest rates."

"We expect RBI to remain on pause in December and February, given upside risks to inflation as well as the fiscal deficit, exacerbated by rising oil prices and a gradually tightening global rates environment. We estimate India`s full year GDP growth to pick up from 6.7 percent in FY18 to 7.3 percent and 7.5 percent in FY19 and FY20, respectively."

Another senior economist at HDFC BANK, Tushar Arora, was quoted by Reuters as, "The GDP number is exactly in line with our expectations. Upbeat corporate earnings results have been reflected in the manufacturing sector. "As the revival continues, we are likely to keep the annual (GDP) forecast unchanged at 6.5 percent."