FY10 GDP comes in 7.2% — The government’s advanced GDP estimate for FY10 pegs growth at 7.2%, higher than our and consensus estimates of 7.0%, as well as the 6.7% growth seen in FY09. Looking at GDP by expenditure, overall consumption was up 4.8% (private at 4.1%; public at 8.2%), while investment growth remained in single digits at 5.2%. In terms of contribution to growth, consumption was the largest at 3.4%, followed by investments at 1.7%, while contrary to past trends net exports were positive at 1.4%. Discrepancies were negligible at 0.6%.
Will these estimates be revised? Agriculture remains the wild card — While trends in industry and services are broadly in line with current trends, agriculture has been a wild card in FY10 (see page 2 for agri estimates). With 1HFY10 GDP at 7% and the impact of the 17% decline in summer crop likely to be felt in the 3Q numbers, the advance GDP numbers imply growth coming in at 8%+ levels in 4Q
Maintain our FY11 GDP and rate estimates — Given the less-than-expected decline in agri in FY10, we have adjusted our FY11 agri estimate from +5% to +4% and marginally upped services.
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