Live news , top stories, corporate news, company news, sector news, economy news, results analysis news, ceo interviews, fund manager interview, advisor interview, market news, bazaar talk, hot stocks news, ipo news, commodities news, mutual fund news, insurance news, news wire
07 March, 2015 01:52 IST

Source: rss | 07-Mar-15
Comments  |  Post Comment

India's GDP growth for 2QFY13 remained muted at 5.3% YoY. Real private consumption slowed down even further to 3.7% YoY. Investment rate showed a minor uptick. But government consumption continues to be the biggest driver.

India remains in the midst of a twin slowdown - private consumption and investment. Lower interest rates and government action towards improving the investment climate will help in reviving GDP growth to 6.6% in FY14E, according to HDFC Securities.

GDP growth at 5.3% was in-line with the estimates. Surprisingly, agriculture reported a growth of 1.2% YoY even though kharif foodgrain production contracted by 5.5% YoY.

Consumption slowdown continued. For instance, real private final consumption (PFCE) growth slowed down further to 3.7% YoY, (-) 30bps QoQ. This is the lowest growth seen in real PFCE in the last 30 quarters. Nominal PFCE did much better owing to inflation.

Services sector growth improved marginally to 7.2% YoY, (+) 30bps QoQ. More importantly, growth in 'trade, hotels, transport and communication' sub-segment (29% of GDP) remained weak at 5.5% YoY (4.0% YoY in 1QFY13). ''We believe this sub-segment will report muted growth in the next few quarters owing to widespread slowdown in discretionary spending,'' it said.

India is in the midst of a twin slowdown - consumption and investment. Hence, the case for lower interest rates looks all the more likely, the stock broker opined. It believes interest rates are likely to come down by 100 bps over the next 12 months.

Investment climate in India remains weak. "Given the low capacity utilization, rising inventory and muted revenue growth, we do not expect a major revival in capex cycle," it said.

However, government action such as a National Investment Board (NIB), passage of key bills and management of subsidies through cash transfers will help in reviving domestic investment and consumption climate, it concluded.

Disclaimer: IRIS has taken due care and caution in compilation of data for its web site. Information has been obtained by IRIS from sources which it considers reliable. However, IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website.

Comments Post comment 
 Post Comment
Name Email
Comment
Security Code type    into this box
Related Articles
FIIs can invest up to 34% in Container Corporation - 05-Mar-2015 18:44
BEML rolls out country's biggest dump truck - 05-Mar-2015 17:45
ICICIdirect selects Tech Mahindra as techno-funda pick - 05-Mar-2015 16:35
Tele2 and HCL Technologies form strategic alliance - 05-Mar-2015 15:52
ONGC's oil production from its western offshore breaks 5 years record - 05-Mar-2015 13:07
NTPC commissions Barh Thermal Power Project - 05-Mar-2015 12:31
Tech Mahindra strengthens footprint in Vietnam - 05-Mar-2015 11:38
Aban Offshore arms redeem outstanding bonds worth Rs 13.35 bn - 05-Mar-2015 09:52
Aban Offshore arms redeem outstanding bonds worth Rs 13.35 bn - 05-Mar-2015 09:52
Axis Bank raises USD 250 mn via overseas bonds - 05-Mar-2015 09:48
Reliance Infra acquires Pipavav Defence - 05-Mar-2015 09:19
more...
Home  |   Shares  |   F&O  |   Mutual Funds  |   Loans  |   Insurance  |   News Centre
Wealth Tracker  |   Newsletters  |   Tax Corner  |   NRI Centre  |   Advertise
© All rights reserved. IRIS Business Services Limited
A Disclaimer