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Is recovery here? GDP data today

All eyes are on India’s gross domestic product (GDP) data for the April-June quarter, set to be released on Monday amid hopes of a strong economic rebound after factory output rose 7.8 per cent in June — the strongest growth in 16 months.

business Updated: Aug 30, 2009 20:56 IST
HT Correspondent

All eyes are on India’s gross domestic product (GDP) data for the April-June quarter, set to be released on Monday amid hopes of a strong economic rebound after factory output rose 7.8 per cent in June — the strongest growth in 16 months.

Manufacturing, which accounts for 80 per cent of overall industrial output, grew by 7.3 per cent. Consumer durables grew by a healthy 15.5 per cent, reflecting a rise in spending on goods like televisions and refrigerators.

Government officials said industrial output is estimated to have clocked a 7 per cent growth in July — the data for which would be released in less than a fortnight.

Recent data, including automobile production, indicate that industrial output data for July would reflect expansion, even though exports have faltered.

But there are two big question marks —plunging exports and deficient rainfall.

Exports fell an annual 27.7 per cent in June to $12.8 billion, the ninth straight monthly fall. It is estimated to have fallen 28 per cent in July.

“Despite positive growth and signs of recovery in the first quarter of 2009-10, the growth outlook for the industrial sector remains mixed,” the Reserve Bank of India has said in its latest annual report.

If rains continue to be elusive, these scattered greenshoots of recovery could dry up in no time. Agriculture accounts for around 17 per cent of the GDP.

“The agricultural growth prospects in 2009-10 have to be assessed taking into account the output impact of deficient monsoon,” the RBI said.

“Given our risk scenario of a 5-8 per cent decline in agricultural GDP, we can expect this year’s shortfall to shave 1 percentage point from overall GDP growth,” Standard Chartered economist Samiran Chakraborty commented.