India GDP Grows Less than Expected in Q4

The Indian economy advanced 6.6 percent year-on-year in the last three months of 2018, below a downwardly revised 7 percent expansion in the previous period and market expectations of 6.9 percent. It is the lowest growth rate in five quarters, due to a slowdown in both private and public expenditure, manufacturing and agriculture.

Slower growth rates were seen in household spending (8.4 percent compared to 9.8 percent in Q3); government consumption (6.5 percent compared to 10.8 percent) and inventories (3.9 percent compared to 4.2 percent). On the other hand, gross fixed capital formation rose slightly faster (10.6 percent compared to 10.2 percent). The was also lower negative contribution from external trade as exports increased at a faster 14.6 percent (13.9 percent) and imports slowed (14.7 percent compared to 21.4 percent).

Household spending accounted for 59.1 percent of the GDP (56.1 percent in Q3); gross fixed capital formation for 33.1 percent (32 percent in Q3); public expenditure for 9.7 percent (11.9 percent in Q3); and changes in stocks for 1.1 percent, the same as in Q3. Exports accounted for 21.4 percent (21.4 percent in Q3) while imports subtracted 25.8 percent (-26.6 percent in Q3).

Gross Value Added, that is, GDP excluding taxes expanded 6.3 percent, below 6.8 percent in the previous period. A slowdown was seen in manufacturing (6.7 percent compared to 6.9 percent in the previous period); agriculture, forestry and fishing (2.7 percent compared to 4.2 percent); and public administration and defence (7.6 percent compared to 8.7 percent). Also, trade, hotel, transport, communication and services related to broadcasting went up 6.9 percent, the same as in Q3. On the other hand, financial, real estate and professional services (7.3 percent compared to 7.2 percent); and construction (9.6 percent compared to 8.5 percent) rose faster; and mining rebounded (1.3 percent compared to -21 percent). 

The government revised down its estimate for FY 2018/2019 (April 2018 to March 2019) growth to 7 percent from 7.2 percent earlier projected.

India GDP Grows Less than Expected in Q4

Joana Taborda |
2/28/2019 12:54:53 PM