The Indian economy picked up in the October-December quarter, but at a slower pace than expected, as it continues to recover from the twin disruptions of demonetisation and a nationwide goods and services tax (GST).
India's gross value added growth stood at 6.7 percent in the third quarter of 2017-18 compared with 6.9 percent in the same period, last year, and a revised 6.2 percent in the previous quarter, according to government data released on Wednesday, 28 February. A Bloomberg poll of economists had pegged GVA growth at 6.7 percent.
GVA has become a preferred measure of economic growth as it strips out the impact of indirect taxes and subsidies. The more commonly tracked gross domestic product growth stood at 7.2 percent compared with a revised 6.5 percent in the second quarter.
The Indian economy was hit by the twin shocks of demonetisation and GST over the past 18 months, disrupting economic activity which has only now started to rebound. For the full financial year 2018-19, the Reserve Bank of India has pegged growth at 7.2 percent compared with 6.6 percent forecast for the current year. A modest revival in the investment cycle along with a pick-up in exports is expected to support this “nascent” recovery, the RBI said.
Economists expected the recovery that began in the second quarter to gather pace in the October-December quarter.
(This article was first published on BloombergQuint.)
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