INSUBCONTINENT EXCLUSIVE:
In April-June, the gross domestic product (GDP) had grown by 8.2%.MUMBAI: Ahead of the official release of the second-quarter GDP figures,
account of a slowdown in rural demand
The largest lender also said in its Ecowrap report that the SBI Composite Leading Indicator (CLI), a basket of 21 leading indicators for the
quarter in consideration, is showing a marginal declining trend
"Consequently, the headline second quarter Gross Value Added (GVA) growth could be 7.3-7.4 per cent, due to the slowing of rural demand,"
the report said on Monday.GVA is the measure of national income and output that includes taxes and excludes subsidies.As per the
first-quarter (April-June) figures released earlier by the Central Statistics Office (CSO), the gross domestic product (GDP) had grown by
8.2 per cent.(: India Moves 23 Positions Higher On World Bank's Ease Of Doing Business Ranking)"We also believe that the growth numbers in
the second quarter will be helped by a weak base in the September quarter of 2017-18
We estimate that the base impact on second quarter GVA growth is around 30 bps (basis points)
Based on tax collections, we subsequently expect second quarter GDP growth at 7.5-7.6 per cent," said the report authored by SBI Chief
Economist Soumya Kanti Ghosh.It also said that commercial vehicle sales, domestic air passenger traffic and cement production have
maintained double-digit growth during the second quarter, pushing up the quarter's GVA estimate."The monthly data of various indicators
for October 2018, however, suggest the GVA growth is slowing down due to decline in demand," Ecowrap said."Of particular concern is that
non-food credit, bank deposits and sale of passenger and commercial vehicles have slowed down as compared to previous month
Also, with a slowdown in government spending in the second quarter, the fiscal impulses to growth would now be clearly missing," it added.(:
In World Top 20 Of GDP Growth Share, Good News For India - Report)The report expressed "particular concern" about a global growth slowdown
and "2019 could be the inflection point."SBI expects manufacturing GVA in the quarter in question to pick up further with better performance
of listed companies."Overall manufacturing sector, which grew by 5.7 per cent in 2017-18, could now accelerate in the current fiscal with
possible support from both crude oil prices and subsequent strengthening of the rupee," it said.(Except for the headline, this story has not
been edited by TheIndianSubcontinent staff and is published from a syndicated feed.)
