All eyes are on India’s gross domestic product (GDP) data for the July-September quarter that would be released on Monday amid signs of a strong economic rebound after a slew of recent data releases confirmed signs of rising domestic demand.
Industrial output grew by 9.1 per cent in September triggering hopes that the worst might be over for the Indian economy.
Manufacturing, which accounts for 80 per cent of overall industrial output, grew by 9.3 per cent, pushing the average growth rate during first six months of the current fiscal year (April to October 2009) to 6.5 per cent, data released a fortnight ago showed.
Consumer durables sector that grew by a healthy 22.2 per cent, perhaps mirroring a higher purchases of goods such as televisions and refrigerators.
Other data releases confirmed signs of rising domestic demand in India. Automobile sales have clocked robust sales since the last few months and grew by 15.6 per cent in October.
GDP for April to June quarter grew 6.1 per cent, up from 5.8 per cent in the previous two quarters.The government expects the GDP to grow by about 6.5 per cent in 2009-10.
Analysts said there were strong indications of a broad-based recovery.
“We expect this momentum to continue at least until March 2010. The data points to a continued upward trend in the next two quarters despite a drag from agriculture, as momentum in the non-agriculture sector gathers steam,” said Sonal Varma of Nomura.
On Saturday, Finance Minister Pranab Mukherjee said the effort now is to bring the economy back on the growth path of 9 per cent per annum at the earliest.
Analysts said policy makers would have to carefully walk the edge to sustain growth amid strong inflationary pressures and poor agricultural output.
“There exist certain downside risks to growth such as mounting inflationary expectations and a lower agricultural growth due to deficient rainfall,” said Yashika Singh, head of economic analysis group of consulting firm Dun and Bradstreet.