Source: The Hindu Businessline

CSO revises GDP estimate for the full year to 6.6%

OUR BUREAU: NEW DELHI, FEBRUARY 28

The economy seems to be getting back on a firm footing with macro-economic indicators released on Wednesday painting a much more optimistic picture, after the setback from demonetisation and the Goods and Services Tax. The Central Statistics Office pegged third-quarter GDP growth at a 15-month high of 7.2 per cent led by robust expansion in manufacturing, trade and hotels as well as construction. This is the fastest growth since the second quarter of 2016-17, when the economy grew 7.6 per cent. For 2017-18, the CSO has also revised upwards its growth projection to 6.6 per cent from its first advances estimate of 6.5 per cent, making India the world’s fastest-growing economy. GDP grew by 7.1 per cent in 2016-17 and the Union Budget has pegged real GDP growth in 2017-18 at 7.2 per cent.

Global rating agency Moody’s on Wednesday forecast 7.6 per cent in calendar year 2018 and 7.5 per cent in 2019. Gross value added (GVA) in the third quarter is also expected to expand at a three-quarter high of 6.7 per cent. Reforms showing results “The economy is on track to accelerate; the current expansion reflects that reforms are showing results,’ said Bibek Debroy, Chairman, Prime Minister Economic Advisory Committee and Member, NITI Aayog. Economists also pointed to a revival in capital formation and warned that the central bank is unlikely to cut rates. “A 12 per cent growth in fixed capital formation pulled up GDP growth, but it needs to be nurtured,” said DK Pant, Chief Economist, India Ratings. The RBI, he said, would hold for a few quarters.

(Source: The Hindu Businessline)