India's March Quarter GDP Grew At 7.5%, Predict Economists

31/05/2016 10:38 AM IST | Updated 15/07/2016 8:27 AM IST
Hindustan Times via Getty Images
SRINAGAR, INDIA - MAY 16: Kashmiri farmers pack strawberries before sending them to the market at a farm on May 16, 2016 in the outskirts of Srinagar, India. Timely rain and favourable weather has proved a boon for the strawberry farmers in Kashmir and they expect bumper production this year. (Photo by Waseem Andrabi/Hindustan Times via Getty Images)

Amid weak global growth, India is on track to continue as the fastest growing economy.

There’s a consensus among leading economists and analysts that India’s March quarter GDP figures likely grew 7.5 per cent compared to the same period last year. India’s official GDP data will be released later on Tuesday. Credit Suisse, Moody's Investors Service, and a Reuters survey of economists have all pegged India’s March quarter GDP growth at 7.5 percent, up from 7.3 per cent in the previous quarter.

"Macro indicators are suggesting that at the ground level the economy is gaining momentum," said Dhiraj Sachdev, a fund manager at HSBC Asset Management in Mumbai told Reuters. "That has also been validated in terms of better corporate earnings in many of the sectors," said Sachdev.

With the exception of public sector banks, the latest earnings season has been a bright spot for Indian companies that have reported results thus far. According to Reuters data, operating profits for 289 companies spiked 25.5 percent in the March quarter compared to a year ago, significantly higher than the 1.7 percent growth seen in the previous quarter.

Meanwhile, economists at Credit Suisse expect a better second half for the Indian economy on the back of good monsoons, better agriculture and improved private consumption.

"We expect growth to improve to 7.8 per cent year-on-year this fiscal from 7.5 per cent last year," Credit Suisse said in the report. It added that India should see a "sharper recovery in second half of the current fiscal with a fuller impact of monsoons on rural consumption which has been a drag, and implementation of pay commission."

Credit Suisse also expects weak imports to marginally improve over the course of the year.

(With PTI inputs)

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