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Led by a recovery in the economy from the third quarter of the fiscal, GDP growth in 2017-18 could be a tad higher than the projected 6.5 per cent.
“There could be a marginal improvement in GDP growth from what was estimated in the first advance estimates. From the third quarter onwards, growth is expected to see a significant upturn with industrial activities slowly coming back to normal,” said a government official. He added that the economy will clock close to 7 per cent growth in the third quarter.
GDP grew by 5.7 per cent in the first quarter and 6.3 per cent in the second quarter of this fiscal.
The Central Statistics Office (CSO) had, in its first advance estimates of national income, pegged GDP growth at a four-year low of 6.5 per cent in 2017-18 due to disruptions from demonetisation and the Goods and Services Tax. The economy grew 7.1 per cent in 2016-17, with the third quarter witnessing 6.7 per cent growth.
However, the Economic Survey was slightly more optimistic and had projected 6.75 per cent growth for 2017-18 “The CSO estimate has not fully factored in the latest developments in the third quarter, especially the greater-than-CSO forecast exports and government contributions to demand,” the Survey had noted, adding that growth would also be aided by a favourable base effect in the fourth quarter.
The CSO will release the second advance estimates of national income for 2017-18 and the GDP estimate for the third quarter (October-December) on February 28.
While expecting improved growth prospects in the third quarter, analysts are keeping their fingers crossed about GDP growth in 2017-18.
“ICRA expects the growth of gross value added (GVA) at basic prices in year-on-year terms to record a sequential recovery to 6.8 per cent in the third quarter from 6.1 per cent in the second quarter, led by the services and industry sector,” the agency said, adding that GDP growth is estimated at 6.7 per cent in 2017-18.
DK Pant, Chief Economist, India Ratings, pegged GDP growth in the third quarter at 6.8 per cent.“The economy is definitely on a recovery mode, but nothing has changed significantly in the period from the CSO’s first advance estimate,” he said.
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