The pace of recovery in the manufacturing sector quickened to 9.2% y-o-y in Q2 vs. 3.4% while the output of mining and quarrying jumped further to 9.5% y-o-y in Q2 from 7.9%, and a raft of lead indicators on the economy such as the US ISM new orders balance and the OECD’s leading indicators all suggest that India’s industrial renaissance should be progressively on track. The growth in the community and social services output, essentially a proxy for government spending, also re-accelerated to a higher-than-expected 12.7% y-o-y in Q1 after throttling back to Q2’s 6.8% from Q1’s 12.5%.
GDP by Activity
GDP by activity rose 7.9% with agri up 0.9%, industry up 8.3% and services up 9.3%. The 8.3% growth in industry growth was led by manufacturing up 9.2%, mining up 9.5%, electricity up 7.4% and construction up 6.5%. As mentioned earlier, commencement of the Cairn India facilities, as well as RIL’s KG gas basin, is not only impacting the mining component, but also electricity. As regards services, the 9.3% growth was due to an upturn in trade, transport and communications up 8.5% as well as community services up 12.7% largely on account of the pay arrears. Financing and insurance was the only component of the service sector which posted a moderation in the current quarter.
Trend in GDP by Activity at factor cost (% y-o-y).
GDP by Expenditure
While headline consumption rose 8.4%, led by public consumption up 27% (largely due to the pay arrears), perhaps the most encouraging bit of data was the uptick in private consumption which rose 5.6% in 2QFY10 v/s the dismal 1.6% in 1QFY10. As regards investments, while gross capital formation decelerated to a low of 1.6%, fixed capital formation which is more reflective of investment trends rose 7.3% YoY from a low of 4.2% in 1QFY10.
Trend in GDP by Expenditure at market price:
No comments:
Post a Comment