IIP to impact Indian economy? GDP numbers may come at 6.7% in Q3 - Analysis is here
According to SBI’s Composite Index for February month increases marginally to 50.60 which is a low growth compared to same month a year ago.
![IIP to impact Indian economy? GDP numbers may come at 6.7% in Q3 - Analysis is here IIP to impact Indian economy? GDP numbers may come at 6.7% in Q3 - Analysis is here](https://cdn.zeebiz.com/sites/default/files/styles/zeebiz_850x478/public/2019/02/25/75858-indian-rupee-reuters.jpg?itok=43NhlrI3&c=94a754cff7001d01ea86df72600f819d)
It seems a new trend is emerging with respect to the growth of Indian economy. India’s Gross Domestic Product (GDP) numbers are expected to come in at 6.7% in third quarter of FY19, which would be lower compared to 7.1% growth rate witnessed in Q2FY19. This time it would be India’s industrial production or factory output which will be the real spoilsport for the country’s economy. According to SBI’s Composite Index for February month increases marginally to 50.60 which is a low growth compared to same month a year ago. While, the monthly SBI Composite index has declined to 11-month low of 46.10 in Jan’19. Thus, IIP numbers for Feb’19 will continue to stay lower at 2%-3%.
SBI Composite Index, a leading indicator for manufacturing activities in the Indian Economy aims to foresee the periods of contraction and expansion. The Composite Index has mainly two indices i.e. SBI Monthly Composite Index and SBI Yearly Composite Index.
With the decline in growth in the SBI Composite Index, Dr. Soumya Kanti Ghosh Group Chief Economic Adviser at SBI says, “ we believe IIP Manufacturing growth may grow at 1.5% and IIP may at 2.5% in Feb’19.”
India’s factory output finally saw some revival in December 2018, by recording growth of 2.4%. This month's IIP stands at 133.7. This is higher compared to 0.3% growth witnessed in November 2018 and 8.4% in October 2018. Cumulatively for the period April- December 2018, the IIP growth rate comes at 4.6% over the corresponding period of the previous year.
Within IIP, India's core sector growth slows down to 17-month low of 2.6% in December, 2018 due to contraction in the production of crude oil, petroleum refinery products and fertilizer.
#ZBizHeadlines | एक नज़र शाम 4 बजे की बड़ी ख़बरों पर। pic.twitter.com/az44qxXiFy
— Zee Business (@ZeeBusiness) February 25, 2019
In this midst, Ghosh also highlighted that, our Composite Leading Indicator (CLI) which has a one-quarter lead over non-agricultural GDP growth, is signaling a moderation in economic activity for Q3 FY19. The CLI Index (a basket of 32 leading indicators) is based on monthly data which shows the early signals of turning-points in economic activity.
Based on the Leading indicators yoy performance, Ghosh says, “ we are expecting the GDP growth to be around 6.6%-6.7% in Q3.”
Interestingly, the CSO has recently revised the GDP growth for FY18 from 6.7% earlier to 7.2%. At this rate, FY19 growth rate would have been at 5.9% (earlier 7.2%).
“ We however believe, that the GDP deflator which is presently at 4.1%, could be revised downwards by at least 50 bps, thus pushing the GDP close to 7.2% in FY19,” Ghosh added.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
![https://www.zeebiz.com/personal-finance/photo-gallery-sip-swp-monthly-pension-income-retirement-corpus-planning-calculator-inr-rs-20000-monthly-investment-for-15-years-inr-99000-monthly-return-for-42-years-313283](https://cdn.zeebiz.com/sites/default/files/styles/zeebiz_700x394/public/2024/09/06/316973-rupee-pixabay-take-1.jpg?itok=02-hJh59)
SIP+SWP: Rs 20,000 monthly SIP for 16 years to get Rs 99,000 monthly income for 42 years; how is it possible?
![https://www.zeebiz.com/market-news/news-bajaj-finserv-rvnl-borosil-renewables-carysil-railtel-corporation-stocks-to-buy-hdfc-securities-recommendation-picks-target-stop-loss-bse-nse-313386](https://cdn.zeebiz.com/sites/default/files/styles/zeebiz_700x394/public/2024/09/06/317091-26.jpg?itok=gE1cWt7z)
RVNL, Bajaj Finserv and 5 more: Brokerage recommends buying these 7 stocks for up to 3 months | Check target, stop loss
![https://www.zeebiz.com/personal-finance/photo-gallery-nps-vs-ups-vs-ops-monthly-pension-income-retirement-corpus-calculator-what-will-be-your-pension-on-inr-rs-10000-contribution-for-35-years-expert-calculations-313361](https://cdn.zeebiz.com/sites/default/files/styles/zeebiz_700x394/public/2024/09/06/317060-rupee-pixabay-take-2.jpg?itok=cOVdof_v)
NPS vs UPS vs OPS: What will be your monthly pension if you contribute Rs 10,000 monthly for 35 years? Get expert calculations
![https://www.zeebiz.com/personal-finance/photo-gallery-top-7-etf-sip-mutual-funds-in-5-years-calculator-how-inr-rs-21000-monthly-investment-has-grown-in-nifty-sp-bse-next-50-cpse-uti-icici-pru-nippon-india-motilal-oswal-bharat-22-nift-mid-infra-313306](https://cdn.zeebiz.com/sites/default/files/styles/zeebiz_700x394/public/2024/09/06/316994-indian-currency-pixabay-take-1.jpg?itok=JURVEkst)
Top 7 ETF Mutual Funds With Highest SIP Returns in 5 Years: How Rs 21,000 monthly SIP has grown in each ETF over the years
![https://www.zeebiz.com/personal-finance/photo-gallery-sbi-senior-citizen-fd-fixed-deposit-latest-interest-rate-2024-calculator-what-be-maturity-amount-with-return-on-investments-of-inr-900000-lakh-in-1-3-5-year-guaranteed-return-scheme-retirement-planning-313221](https://cdn.zeebiz.com/sites/default/files/styles/zeebiz_700x394/public/2024/09/06/316909-note-coin-pixabay-take-1.jpg?itok=3RPKcBYE)
SBI Senior Citizen FD Rates 2024: What you can get if you invest Rs 3 lakh, Rs 5 lakh, Rs 7 lakh, and Rs 9 lakh in 1-, 3-, and 5-year FDs
07:11 PM IST