Monday, 29 August 2016

Good Q1 GDP expected due to normal monsoon, salary hikes-The Total Investment & Insurance Solutions

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29Th Aug 2016

India's national income figures for the first quarter of the current fiscal 2016-17 are due for release on Wednesday, against the backdrop of expectations aroused by a normal monsoon and the recent pay hikes for central government employees. The Total Investment & Insurance Solutions

The government expects Gross Domestic Product (GDP) growth to pick up to eight per cent in 2016-17, from 7.6 per cent in 2015-16.

"A number of structural reforms have been undertaken by the government over the last two years. The impact of all this is beginning to be felt now. We are hoping to better our growth from last year and get closer to eight per cent," Economic Affairs Secretary Shaktikanta Das told reporters here on Saturday. The Total Investment & Insurance Solutions

"Also, this year monsoon has been good. Agriculture production is expected to be better than previous two years which will contribute significantly to GDP," he added.

Financial services firm DBS said in a research note that on gross value added basis, India's growth is expected to have stabilized at 7.4 per cent in the June quarter, which is slightly higher than the 7.2 per cent in the same quarter a year ago.

"For the year we look for growth to average 7.8 per cent this year, from FY15/16's 7.2 percent," it said. The Total Investment & Insurance Solutions

Multilateral agencies like the International Monetary Fund (7.4 per cent) and the Asian Development Bank (7.4 per cent) have estimated that the Indian economy is likely to slow down from last year's level. The Total Investment & Insurance Solutions

However, American agencies like Fitch Ratings and investment banker Goldman Sachs have projected the economy to marginally accelerate in the current fiscal.

In fact, the Indian government on Thursday lauded Goldman Sachs for awarding a growth forecast of 7.9 per cent for the Indian economy in the current fiscal, riding on an improved monsoon, key reforms and increased FDI inflows.

"Happy that Goldman Sachs forecast Indian economy to clock 7.9 per cent growth in current fiscal with better monsoon, key reforms and FDI (foreign direct investment) inflows," M. Venkaiah Naidu, Union Minister of Urban Development, Housing and Urban Poverty Alleviation, said in a tweet. The Total Investment & Insurance Solutions

"Goldman Sachs lauded several important policy changes and reforms that were carried out like GST (Goods and Services Tax) bill passage, bankruptcy code, government approval of inflation targeting framework and measures to ease doing business," he said.

A pick-up in infrastructure investment and easing in foreign direct investment (FDI) restrictions in the defence, aviation, retail and e-commerce sectors was also hailed by Goldman Sachs, he added. The Total Investment & Insurance Solutions

Moody's Investors Service in August had forecast the real GDP growth for India at around 7.5 per cent for FY2017. The Total Investment & Insurance Solutions

In the fourth quarter of 2015-16 ending March, India's economy accelerated to grow at 7.9 per cent, buoyed by improved agricultural performance and growth in consumption.

Private consumption growth remained robust at 7.4 per cent in 2015-16, though it was marginally revised downward from the 7.6 per cent estimated earlier.


Central Statistics Office (CSO) data showed India's economy grew at 7.6 per cent in 2015-16, making the country the fastest growing major economy for the second consecutive year despite two failed monsoons.The Total Investment & Insurance Solutions

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