Sept quarter growth seen at 6.3%

Sept quarter growth seen at 6.3%
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First Published: Fri, Nov 27 2009. 11 33 AM IST
Updated: Fri, Nov 27 2009. 11 33 AM IST
Mumbai: India’s economy is forecast to have grown an annual 6.3% in the September quarter, a Reuters poll shows, its fastest rate in the year since the global economic crisis hit the country harder than expected.
The growth is driven by a jump in industrial production and signs of recovery in the global economy and will add to the case for the removal of stimulus measures and a tightening of monetary policy next year.
The poll of 22 analysts showed gross domestic product in Asia’s third-largest economy is seen expanding 6.3% from a year earlier in the September quarter, picking up a touch from 6.1% in the June quarter.
It would be fastest growth since the economy grew an annual 7.6% in the July-September quarter of 2008.
The data is due around 11 am (0530 GMT) on Monday.
“GDP growth is expected to have improved due to stronger industrial expansion and services sector activity,” said Gunjan Gulati, an economist at JPMorgan in Mumbai.
“Improved aggregate demand supported by the impact of government’s fiscal stimulus measures, along with weak growth last year, drove industrial production growth,” she said.
Industrial output rose a faster-than-expected 9.1% in September from a year earlier, the ninth successive month of growth.
After the global economic crisis hit India harder than expected last year, the central bank slashed interest rates and flooded markets with funds, while the government rolled out fiscal stimulus measures.
Policymakers have said that the exit from an accommodative stance would be a gradual one and hinges on a sustained domestic and global recovery.
Union finance minister Pranab Mukherjee has said the focus would be on driving domestic demand until key developed markets recover, and there was no plan yet to withdraw fiscal stimulus measures.
In its October policy review, the RBI had raised the statutory liquidity ratio, the percentage of deposits banks must invest in government bonds, by 100 basis points, unwinding a cut made last year during the credit crisis.
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First Published: Fri, Nov 27 2009. 11 33 AM IST
More Topics: Economy | GDP | Inflation | Growth | Infrastructure |