India may hit double digit growth this year, 
30 Nov, 2010, 11.20AM IST,AGENCIES
India's Q2 GDP growth above estimates at 8.9% vs 8.8% QoQ
India's Q2 GDP growth above estimates at 8.9% vs 8.8% QoQ - The Economic Times
NEW DELHI: India's economy grew a forecast-beating 8.9 percent year-on-year in the July-September quarter, data showed on Tuesday, as the South Asian nation returned to pre-financial crisis expansion levels.
The fiscal second-quarter boom beat expectations of growth of around 8.2 percent and was propelled by a 9.8-percent jump in manufacturing from a year earlier and an 8.8-percent leap in construction.
Asia's third-largest economy also got a boost from stronger farm production, which expanded 4.4 percent, thanks to a bountiful monsoon, data from the Central Statistical Organisation showed.
The growth estimates got a leg up as the industrial sectors, which account for approximately 20% of the overall GDP, got a boost in the second quarter due to the lower inflation numbers under the new series.
Lower inflation numbers gave a statistical boost to industrial growth estimates and national income numbers, compared with those estimated using the old series.
Rupa Rege Nitsure, Chief Economist, Bank of Baroda , said: "This indeed is a very strong reading despite the fact that we had seen some easing of industrial production in the second quarter. With this reading, achieving a 8.5 percent for full year growth target is not going to be difficult. From a market perspective, this means that India will attract more capital inflows and it will put upward pressure on the rupee."
"From the central bank perspective, this data will enable them to concentrate on inflation management. I expect the Reserve Bank of India to continue caliberating monetary policy. I expect another 25 basis points increase in both repo and reverve repo rates in the December policy and depending on the intensity of capital flows that the country attracts, there is a strong possibility of a CRR (cash reserve ratio) hike in the fourth quarter," added Nitsure.
Annual headline inflation eased to 8.58 percent in October from a year earlier, lowest in last 10 months. Asia's third-largest economy is expected to grow 8.5 percent in the current fiscal to March 2011.
The economy, which had grown more than an annual 8 per cent in the last two quarters, has been riding on robust manufacturing activity and the outlook for farm output has brightened following good monsoon rains.
The central bank's next monetary policy review is on Dec. 16. Analysts polled by Reuters expect the RBI to raise rates by an additional 25 basis points by the end of the fiscal year that ends in March.
30 Nov, 2010, 11.20AM IST,AGENCIES
India's Q2 GDP growth above estimates at 8.9% vs 8.8% QoQ
India's Q2 GDP growth above estimates at 8.9% vs 8.8% QoQ - The Economic Times
NEW DELHI: India's economy grew a forecast-beating 8.9 percent year-on-year in the July-September quarter, data showed on Tuesday, as the South Asian nation returned to pre-financial crisis expansion levels.
The fiscal second-quarter boom beat expectations of growth of around 8.2 percent and was propelled by a 9.8-percent jump in manufacturing from a year earlier and an 8.8-percent leap in construction.
Asia's third-largest economy also got a boost from stronger farm production, which expanded 4.4 percent, thanks to a bountiful monsoon, data from the Central Statistical Organisation showed.
The growth estimates got a leg up as the industrial sectors, which account for approximately 20% of the overall GDP, got a boost in the second quarter due to the lower inflation numbers under the new series.
Lower inflation numbers gave a statistical boost to industrial growth estimates and national income numbers, compared with those estimated using the old series.
Rupa Rege Nitsure, Chief Economist, Bank of Baroda , said: "This indeed is a very strong reading despite the fact that we had seen some easing of industrial production in the second quarter. With this reading, achieving a 8.5 percent for full year growth target is not going to be difficult. From a market perspective, this means that India will attract more capital inflows and it will put upward pressure on the rupee."
"From the central bank perspective, this data will enable them to concentrate on inflation management. I expect the Reserve Bank of India to continue caliberating monetary policy. I expect another 25 basis points increase in both repo and reverve repo rates in the December policy and depending on the intensity of capital flows that the country attracts, there is a strong possibility of a CRR (cash reserve ratio) hike in the fourth quarter," added Nitsure.
Annual headline inflation eased to 8.58 percent in October from a year earlier, lowest in last 10 months. Asia's third-largest economy is expected to grow 8.5 percent in the current fiscal to March 2011.
The economy, which had grown more than an annual 8 per cent in the last two quarters, has been riding on robust manufacturing activity and the outlook for farm output has brightened following good monsoon rains.
The central bank's next monetary policy review is on Dec. 16. Analysts polled by Reuters expect the RBI to raise rates by an additional 25 basis points by the end of the fiscal year that ends in March.
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