Why GDP may have picked up in the second quarter
A marginal pickup in bank credit and robust rail and air traffic may provide the cushion to growth in the second quarter
India’s economy may have gathered steam in the July-September quarter on the back of the better industrial growth and a pickup in government expenditure, despite a 15% shortage in monsoon rainfall, which may impact output. Gross domestic product (GDP) data for the fiscal second-quarter will be released on Monday.
In the first quarter of 2015-16, GDP slowed to 7.5% from 7.5% in the preceding three months. The government expects growth to be above 7.5% in the year to March, while most economists expect it to remain between 7.3-7.5%. In 2014-15, the economy grew 7.3%. While a sharper contraction in exports (minus 18.4%) will drag economic expansion down in the second quarter, a marginal pickup in bank credit and robust rail and air traffic may provide the cushion to growth during the period
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