Home / Economy / GDP likely grew 6.4% in July-September, shows poll

India’s economic growth may have slowed to 6.4% in the September quarter from 13.5% in the preceding three months as the favourable base effect faded and industrial activity slowed, according to a poll of 16 economists.

The median prediction for gross domestic product (GDP) growth was 6.4%, with forecasts ranging between 6% and 6.5%. The government is scheduled to release GDP data on 30 November.

On 30 September, the Reserve Bank of India (RBI) projected GDP to grow 6.3% in the fiscal second quarter.

GDP had recorded double-digit growth in the June quarter as the severe second wave of the pandemic and lockdowns in the same period a year ago had led to low base. While the normalization of the base will influence the September quarter GDP growth number, the survey’s median projection implies a growth of 3.6% from the preceding three months. While services and agricultural activity picked up pace in the September quarter, industrial activity slowed down.

“There was also a loss of momentum in the industry sub-sectors, as signalled by corporate earnings, which likely contracted on a year-on-year basis and a steep drop in industrial production growth to low single digits," said Kanika Pasricha, economist at Standard Chartered Bank.

Companies’ earnings fell 25% from a year ago due to inflationary pressures, according to a Mint analysis of 2,923 firms excluding financials and banks. While pent-up demand would have played a positive role in boosting consumption, global headwinds and an exports slowdown likely weighed on growth, economists said.

RBI’s projection pegged full-year GDP growth at 7%, and should growth come in at 6.4% in Q2; it would imply an average growth of 4.1% in the second half to 31 March. “While we see room for continued outperformance, India’s growth trajectory is pointing to a soft landing, , as the impact of slowing global activity, elevated and sticky commodity prices, and tighter domestic monetary conditions take a toll," Barclays said in a report on Tuesday.

ABOUT THE AUTHOR

Manjul Paul

Manjul Paul is a data journalist. She joined Mint in October 2021. Previously, she worked witth the Reuters polling team in Bangalore as a correspondent for four years.
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