India's Q2 economic growth picks up to 6.3%, breaks 5-quarter slide

Kashmir Times. Dated: 12/1/2017 3:30:11 PM

NEW DELHI, Nov 30 (Agencies): India's economic growth pace picked up to 6.3 percent in the three months ending in September, halting a five-quarter slide as businesses started to overcome teething troubles after the bumpy launch of a Goods and Services Tax (GST).
Gross domestic product grew 6.3 percent in July-September, its fastest pace in three quarters, the data showed.
Growth had slid to a three-year low of 5.7 percent for the three months to June on the spillover effects of the note ban and the GST implementation.
In July-September, auto sales, manufacturing, electricity generation grew more quickly than in the previous quarter.
On November 17, Moody's upgraded India`s sovereign credit rating for the first time in nearly 14 years, saying continued progress on economic and institutional reforms would boost its growth potential.
It expects the economy to grow 6.7 percent in the fiscal year ending March 31, and 7.5 percent the following year.
Modi government hopes the ratings upgrade can attract more foreign investors, who pumped USD 15 billion into Indian equities in July-September, up 44 percent from the previous quarter. The main NSE share index is up 27 percent in 2017.
Still, the world`s seventh largest economy, which grew at more than 9 percent a year from 2005 through 2008 is far from firing on all cylinders. Domestic demand and private investments remain weak.
After front-loading state spending in the fiscal year`s first half, Finance Minister Arun Jaitley has limited room to spend amid slowing revenue growth.
Finance Ministry officials hope the central bank will cut interest rates soon, but analysts say that rising global oil prices, which could pinch consumers through higher inflation, may instead force the RBI to hike in the second half of 2018, denting growth momentum.

 

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