India’s real GDP growth likely to have moderated in Q2 2018

The Indian economic growth data for second quarter is set to release this week. Barring the market-driven moves, the Indian rupee is expected to find some respite from the upcoming GDP report, noted DBS Bank in a research report. Markets might seek clarity on the momentum of the economic growth, when the second quarter GDP figures are released on Friday.

“We expect real GDP growth to moderate to 7.5 percent YoY (with upside risks) vs 7.7 percent in the March 2018 quarter”, stated DBS Bank.

Private consumption and higher public sector-driven capital expenditure spending are expected to have aided the GDP growth, while external goods trade softened. Under GVA, growth is expected to have risen 7.4 percent, supported by non-farm activity while the agricultural sector deals with easing real wage growth, falling crop prices and subdued terms of trade.

Increased cement production augurs well for construction activity and the services sector advanced from more rapid public administration services and a rebound in non-food credit. Utilities and manufacturing, along with overall production rose in the June quarters as compared with the same period last year, stimulated also by base effects as manufacturers drew down on stocks ahead of the GST rollout in July 2017, said DBS Bank.