India to Clock GDP Growth of 7.7% in Jan-March: Nomura Report

GDP data could be showing you only half the picture. 

(Photo: Reuters)

Despite moderation in factory output growth in March, India's GDP is expected to grow by 7.7 percent in January-March quarter, up from 7.2 percent in the preceding quarter, says a Nomura report.

According to the Japanese financial services major, despite the moderation in March, industrial production growth averaged 6.2 percent in the January-March period, up from 5.9 percent in Q4 (October-December).

The uptick in average industrial production growth, implies that the overall industrial activity strengthened in Q1 (January-March), "supporting our view of a pick-up in GDP growth to 7.7 percent year-on-year in Q1 from 7.2 percent in Q4," the report said.

The report further noted that India is expected to witness cyclical recovery led by both investment and consumption. However, factors like rising oil prices as well as tighter financial conditions are expected to drag down growth rates.

While we remain optimistic on the near-term growth outlook, we expect the adverse impacts of rising oil prices and tighter financial conditions to slow growth further out.

Nomura, Japanese financial services major

According to official data, industrial output growth fell to a five-month low of 4.4 percent in March due to decline in capital goods production and deceleration in mining activity and power generation.

Industrial growth as measured by the Index of Industrial Production (IIP) in 2017-18 too decelerated to 4.3 percent from 4.6 percent in the previous fiscal.

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