What will be India's advanced GDP numbers for FY18?

  • What will be India's advanced GDP numbers for FY18?

What will be India's advanced GDP numbers for FY18?

The Central Statistics Office (CSO) will release the first advance estimates of GDP growth for 2017-18 on Friday, a practice it started a year ago after the government shifted the presentation of the Union Budget to 1 February from end February.

The Indian economy is forecast to grow at its slowest in four years in FY18 but is expected to pick up pace in the second half of the year.

The projections on Friday would be based on incomplete output and corporate income data. Echoing similar concerns. Sugata Bhattacharya, chief economist at Axis Bank, said the Gross Value Added (GVA) would be 6.6-6.8 per cent for the current fiscal. Most of the economist echo the view that the economy will grow at lower levels in the range of 6.5 to 6.7 percent. However, the latest numbers have put a dampener on any such hope. "Our fears and warnings have proved true. These numbers prove there is a slowdown", he tweeted.

The outcome was that India's export growth turned negative in October. And finally admonishing the government to begin doing "solid work"; "it is time government stops making tall claims and bends down to do solid work".

On the other hand, growth in the "agriculture, forestry and fishing", "mining and quarrying", "manufacturing" and "construction" sectors "is estimated to be 2.1 percent, 2.9 percent, 4.6 percent and 3.6 percent", respectively. Real or inflation-adjusted GDP is usually calculated by subtracting the growth in actual or nominal GDP by the inflation rate or "price deflators". However, the fiscal deficit at the end of November touched Rs 6.12 lakh crore, or 112 per cent of the budget estimate for 2017-18, mainly because of weak GST collections and higher government spending. This could translate into a slippage of 0.05% on the budgetary fiscal deficit target of 3.24%. Private investment has not yet shown any signs of picking up in a big way.

Finance, insurance, real estate and profession services sector is expected to post 7.3% growth, up from 5.7% in 2016-17.

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Aditi Nayar, principal, economist ICRA, said the Mospi's estimates of GDP and GVA were conservative.

The advance estimates have, however, been compiled on the basis of actual data of the last seven months (April-October) in the fiscal 2017-18 and extrapolated for the next five months (November-March) on the basis of that.

"Even the current GDP forecast of 6.5 per cent is likely to be hard to attain, given that growth in the first half was just 6 per cent", Rao added.

Ranen Banerjee, partner - public finance and economy, PwC India, termed the ministry's estimate achievable. Subsequent data - core sector, purchasing managers' index (PMI), and vehicle sales - have been upbeat, corroborating the second-half recovery estimated in the number released.

"Further wearing off of the demonetisation related residual effects as well as progressively stabilising the transitionary effects of GST is likely to support the higher growth rate estimates for the last two quarters", Mr. Banerjee added.

"Implicit calculation suggests H2 FY18 growth will be 7%", chief statistician T C A Anant told a news conference as he presented an analysis of the first advance estimates of national income for 2017-18.