Expert views - India's economic growth accelerates to 7.4 percent in July-September

Reuters
A worker separates casting joints of gearboxes inside a small-scale automobile manufacturing unit in Ahmedabad, India, October 12, 2015. REUTERS/Amit Dave/Files

MUMBAI (Reuters) - India's annual economic growth (INGDPQ=ECI) accelerated to a slightly stronger-than-expected 7.4 percent in the three months through September from 7.0 percent in the previous quarter, government data showed on Monday.

COMMENTARY

ABHEEK BARUA, CHIEF ECONOMIST, HDFC BANK, NEW DELHI

"This suggests still a fairly tepid performance in the economy although some of the gains are essentially due to value addition, low commodity prices and so on.

"Prima facie, the number seems reasonably good. Clearly we are stuck in a groove which is considerably lower than what our potential is.

"RBI would have factored this in, very much in line with their forecast they have for the year. They are working with the assumption that we are growing below potential. But they have front-loaded their rate cuts. I don't think they will make any overt gestures towards growth at this stage."

A. PRASANNA, ECONOMIST, ICICI SECURITIES PRIMARY DEALERSHIP, MUMBAI

"The number is along expected lines. The economy has bottomed out, but the recovery continues to be quite protracted and patchy.

"We expect full year GVA (gross value added) growth at 7.3 percent. We expect a gradual recovery in 2016/17 in the average of 7.5-8.0 percent on the back of higher consumption growth.

"As far as monetary policy is concerned, we expect RBI to continue to remain accommodative, and a further rate cut will be dependant upon government's fiscal road map and evolution of inflation in months ahead."

ASHUTOSH DATAR, ECONOMIST, IIFL INSTITUTIONAL EQUITIES, MUMBAI

"It's neither a positive surprise nor a negative surprise. Growth is tracking as per RBI's trajectory of between 7 percent to 7.5 percent for the full year. That's where the consensus number is.

"In that sense it's neither an alarming signal nor a sign that we're growing faster than estimated, so there is need to be cautious on rate cuts. It doesn't change anything. No change expected tomorrow (from the RBI)."

(Reporting by Karen Rebelo in Mumbai)