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HSBC expects Jan-March quarter GDP growth at 7 per cent

Jyotindra Dubey     May 28, 2015

HSBC expects fourth-quarter GDP for 2014/15 to grow at 7 per cent, lower than the 7.5 per cent growth reported in the previous quarter, as per Central Statistics Office (CSO). The CSO numbers for the fourth quarter will be released on Friday.

Moody's pegs the number at 7.2 per cent.

The HSBC report also sliced down India's GDP into sectors. According to the report, 60 per cent of India's GDP is still in the woods. On the production side, agriculture, construction, banking and public services are not showing any sign of improvement and only remaining 40 per cent of GDP including manufacturing, utilities, trade and transport has shown some improvement, but still the growth is very slow.

Even if we look at the expenditure side of the GDP, not much of revival has happened. The rural consumption is down, the government spending and exports growth have also slowed down. Marginal uptick in urban consumption and investments is the only breather.

"We get the January-March (new) GDP print tomorrow. While its trajectory has been unpredictable, coincident indicators suggest that since the majority of GDP components are worsening, this quarter's GDP print will be lower than last quarter's 7.5 per cent y-o-y. The lack of improvement will likely warrant a 25 basis points rate cut in the upcoming June 2 RBI policy meeting," Pranjul Bhandari, Chief India Economist at HSBC, said in a research note.

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