Indian GDP Bounces Back to 6.3% in Q2 From 5.7% in Q1

The GDP numbers fall in line with previous estimates.

GDP data could be showing you only half the picture. 

(Photo: Reuters)

Indian Gross Domestic Product (GDP) improved in the three months ended September recording 6.3% growth in the period, government data showed on Thursday. It’s a jump from the three-year low numbers from Q1 of 5.7%, suggesting that the impact of demonetisation and the Goods and Services Tax has started to fade.

The GDP had been sliding for the last five quarters. It was 7.5% in the September quarter of 2016-17. The GVA (Gross Value Added) to the economy stands at 6.1% up from 5.6% in the last quarter.

This was largely in line with what was estimated. A Bloomberg poll of 46 economists had pegged GDP growth at 6.%. Reuters had also predicted the same figure.

In July-September, auto sales, manufacturing, electricity generation grew more quickly than in the previous quarter.

GDP at 6.3% marks a reversal of the trend. Impact of demonetisation, GST is behind us; hopefully, growth in coming quarters will be on upward trajectory.

FM Arun Jaitley 

The GDP number is exactly in line with our expectations. Upbeat corporate earnings results have been reflected in the manufacturing sector. As the revival continues, we are likely to keep the annual (GDP) forecast unchanged at 6.5%.

Tushar Arora, senior economist of HDFC Bank told Reuters

The economic activities which registered growth of over 6% in Q2 of 2017-18 over Q2 of 2016-17 are ‘manufacturing, electricity, gas, water supply’ and ‘other utility services and trade, hotels, transport and communication and services related to broadcasting’.

The agriculture, forestry and fishing sector is estimated to have grown by 1.7%. Construction sector grew by 2.6%t as compared to growth of 4.3% in Q2 of 2016-17.

Chief Statistician TCA Anant said the numbers were encouraging and cited the festive season as a reason behind the growth. He, however, commented that the agriculture and construction sectors’ performance was poor.

Construction continues to be low. It is indicator driven and based on steel and cement, and those numbers have not show high growth.

TCA Anant, Chief Statistician of India

‘Solid Management,’ Says BJP; ‘Far Below the Promise,’ Says Opposition

Soon after the announcement, Railways Minister Piyush Goyal praised the Prime Minister on Twitter for the rise in GDP and BJP President Amit Shah called it a “reflection of solid economic management by the Modi Government.”

However, Opposition leader and former Finance Minister P Chidambaram called the Q2 figures a ‘pause’ in the declining trend and added that “6.3% is far below the promise of the Modi government”.

West Bengal CM Mamta Banerjee cited last year’s numbers and hit out at the government.