Indian economic growth likely to have accelerated to 8 pct year-on-year in Q2 2018

Indian second quarter economic growth data is set to release next week. In the recent quarters, Indian economic growth has been on a path of steady rebound. In the March quarter, headline growth had reached 7.7 percent, from a low of 5.6 percent in the second quarter. According to a Barclays research report, the Indian economy is expected to have grown 8 percent year-on-year in the second quarter.

Based on a wide set of leading indicators, the recent recovery of India’s growth is expected to be greatly maintained in the quarters ahead. Any weakening in the year-on-year optics is expected to be just modes in the second half of FY 2018-2019, despite the fading of favourable base effects.

“Overall, we continue to expect India’s GDP to grow 7.6 percent y/y during FY 18-19, which would represent a notable pick up from the near-term trough of 6.7 percent in FY 17-18”, stated Barclays.

The continued uptick underpins the view that the slowdown in growth last year reflected many sharp, one-off disruptions and was not because of fundamental dents in key growth drivers.