Expert views on India's economy growing 7.5 pct in Jan-March
MUMBAI (Reuters) - India's economic growth accelerated to 7.5 percent in the three months through March from a year earlier, while the annual October-December growth was revised to 6.6 percent from the previously reported 7.5 percent, according to government data on Friday.
Below are comments from analysts on the data:
D.K. JOSHI, CHIEF ECONOMIST, CRISIL, MUMBAI
"There is some disconnect between the GDP numbers and the situation on the ground.
"I think there are methodological issues. That is why there is a variance between the volume indicators available at the ground level and value indicators which are being increasingly used in the computation of the GDP.
"It will take us some time to understand that. These numbers should not influence the central bank.
"We expect the central banks to cut rates by 25 bps on June 2."
RADHIKA RAO, ECONOMIST, DBS, SINGAPORE
"The RBI Governor has highlighted his reservations on the new data series.
"Hence policy makers are likely to infer the growth momentum from other lead indicators like industrial production, non-oil non-gold imports, and PMIs (purchasing managers indexes). The common undercurrents there are that a recovery is taking place, but it has been a very gradual process.
"To that extent, the recovery trend will be interpreted as modestly positive and not as strong as the new headline GDP seems to suggest. We reckon Tuesday's rate cut is still on the table.
ABHISHEK UPADHYAY, ECONOMIST, ICICI SECURITIES PRIMARY DEALERSHIP LTD, MUMBAI
"This data is based on value-added, so it is difficult to feel and correlate with what is happening to high frequency data like credit growth, rural and urban wages and passenger car sales, which are all still weak.
"RBI will have to feel its way in the economy to get an idea about prices and be confident about their inflation projection. We expect the RBI to cut the repo rate by 25 basis points."
SHILAN SHAH, INDIA ECONOMIST, CAPITAL ECONOMICS, LONDON
"At face value, today's GDP figures for (January-March) suggest that India is the fastest-growing major economy in the world. In reality though, the GDP data remain wildly inconsistent with numerous other indicators that point to continued slack in the economy.
"The big picture is that the official GDP data are overstating the strength of the economy, most probably by a significant margin.
"The Reserve Bank (of India) appears to be putting more emphasis on indicators such as capacity utilisation, bank lending, sales of consumer goods and core inflation in policy decisions. On these measures, the case for further policy loosening remains strong.
SHUBHADA RAO, CHIEF ECONOMIST, YES BANK, MUMBAI
"The downward revision in Q3 suggests some loss of momentum began in the second half of FY2015.
"The GVA (gross value added), however, has a different story to tell, showing a marked sequential slowdown from Q2 onwards, implying that larger growth has come on account of net taxes on products.
"Agriculture, electricity, construction, finance and public services sectors have slowed in the last quarter.
"Worries of disconnect persist. High frequency data suggests a larger slowdown in Q4 and not in Q3. We continue to rely on high frequency indicators. Challenges remain for understanding the deviations".
(Reporting by Suvashree Choudhury, Himank Sharma, and Swati Bhat; Compiled by Rafael Nam)
