New Delhi: India’s economy grew at a slower than-expected pace of 7.1 per cent in the three months through June from 7.9 per cent in the previous quarter, government data showed on Wednesday.
Analysts polled by Reuters had forecast 7.6 per cent growth in gross domestic product during the April-June quarter.
Anjali Verma, economist, PhillipCapital (India), Mumbai
“The possibility of maintaining near 8 percent growth for the full year now looks slightly at risk. There is definitely a chance of recovery in the second half, but not much in investments.”
Rupa Rege Nitsure, group chief economist, L&T Finance Holdings, Mumbai
“While high frequency data show a growth pick-up in core industries like mining and construction activity, the GVA data show growth coming from manufacturing. This is quite puzzling.
“With weaknesses continuing from private sector consumption and capex sentiment, it’s not very clear what is driving the manufacturing growth in the GDP statistics.”
Devendra Kumar Pant, chief economist, India Ratings and Research
“This number is much, much below the market expectation. This makes it difficult for the entire year growing around 8 percent.
“Only thing is that from the third quarter you’ll have the positive impact of monsoon coming in and the positive impact of pay revision, which will revive demand to a certain extent. But investment is unlikely to grow very fast.”
Shubhada Rao, group president & chief economist, Yes Bank
“Mining and construction are on a disappointing path in terms of direction. Overall, momentum seems to have gotten weaker.
“I think there is still tentativeness in sustaining the growth momentum as reflected by this data. Broadly, investment continues to remain on a weak turf. We hope that in the second half, consumption will support growth. The high frequency indicators do suggest a recovery.
“We are looking at an October-December rate cut because we do see disinflation in food and that could give a small room to the RBI.”
Abhishek Upadhyay, economist, ICICI Securities Primary Dealership, Mumbai:
“Growth continues to be driven by government spending while private spending remains muted, which is a worry. Agriculture growth came weak this time but good monsoon is expected to boost overall growth in the second half.
“We continue to expect GDP to grow at 7.7-7.8 per cent for the full fiscal year ending in March and GVA growth of 7.6 per cent.”