The first quarter of India’s Fiscal Year 2009, covering April, May and June 2009, showed an annual growth rate of 6.1 percent. The significant drivers of economic growth included trade, hotels, transport and communication (8.1 percent year-over-year), financing, insurance, real estate and business services (8.1 percent year-over-year), mining (7.9 percent year-over-year), construction (7.1 percent year-over-year), community, social and personal services (6.8 percent year-over-year), and utilities (6.2 percent year-over-year).
Earlier, The Reserve Bank of India issued a conservative growth forecast for the Indian economy, warning about continued uncertainty about the global outlook (see India Holds Interest Rates Steady, Sees Inflation). It predicted GDP growth of 6 percent, lower than last year’s growth of 6.7 percent and below a government forecast of about 7 percent for 2009/10. Economic analysts at RGE Monitor have forecast that India’s GDP in 2009 may fall to as low as 5 percent (click here for previous post).
An article in the Wall Street Journal notes some analysts’ concerns over the poor start to the monsoon season. “Over a third of India’s 625 administered districts have declared drought, and analysts warn weak rains will likely crimp output of summer sown crops and squeeze rural incomes, depressing demand for everything from motorcycles to cellphones,” the article notes.
“India will find it difficult to sustain on-year GDP growth of over 6% in the remaining three quarters of the current fiscal year in view of the monsoon setback,” said Rupa Rege Nitsure, chief economist at Bank of Baroda.
The government is trying to support the agriculture sector by increasing the minimum selling price of rice and sugar. It has also offered to subsidize diesel for farmers to bring down irrigation costs, and provided additional electricity to key farming provinces such as Punjab and Haryana.
Assuming the current struggles in the agriculture sector do not worsen, India appears to be emerging from the global recession in good shape. Investors looking to allocate a portion of their portfolios to India, may want to consider the iPath MSCI India Exchange Traded Fund, ticker symbol: INP (disclosure: Trafalgar Investment Advisers LLC Model Portfolio has a long position in this fund).
For a full breakdown of India’s gross domestic product as reported by India’s Central Statistical Organisation click the following link: ESTIMATES OF GROSS DOMESTIC PRODUCT FOR THE FIRST QUARTER (APRIL-JUNE) OF 2009-10
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Gregg D. Killoren
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India’s GDP Grows at 6.1 Percent Annual Rate 1Q FY 2009
The first quarter of India’s Fiscal Year 2009, covering April, May and June 2009, showed an annual growth rate of 6.1 percent. The significant drivers of economic growth included trade, hotels, transport and communication (8.1 percent year-over-year), financing, insurance, real estate and business services (8.1 percent year-over-year), mining (7.9 percent year-over-year), construction (7.1 percent year-over-year), community, social and personal services (6.8 percent year-over-year), and utilities (6.2 percent year-over-year).
Earlier, The Reserve Bank of India issued a conservative growth forecast for the Indian economy, warning about continued uncertainty about the global outlook (see India Holds Interest Rates Steady, Sees Inflation). It predicted GDP growth of 6 percent, lower than last year’s growth of 6.7 percent and below a government forecast of about 7 percent for 2009/10. Economic analysts at RGE Monitor have forecast that India’s GDP in 2009 may fall to as low as 5 percent (click here for previous post).
An article in the Wall Street Journal notes some analysts’ concerns over the poor start to the monsoon season. “Over a third of India’s 625 administered districts have declared drought, and analysts warn weak rains will likely crimp output of summer sown crops and squeeze rural incomes, depressing demand for everything from motorcycles to cellphones,” the article notes.
“India will find it difficult to sustain on-year GDP growth of over 6% in the remaining three quarters of the current fiscal year in view of the monsoon setback,” said Rupa Rege Nitsure, chief economist at Bank of Baroda.
The government is trying to support the agriculture sector by increasing the minimum selling price of rice and sugar. It has also offered to subsidize diesel for farmers to bring down irrigation costs, and provided additional electricity to key farming provinces such as Punjab and Haryana.
Assuming the current struggles in the agriculture sector do not worsen, India appears to be emerging from the global recession in good shape. Investors looking to allocate a portion of their portfolios to India, may want to consider the iPath MSCI India Exchange Traded Fund, ticker symbol: INP (disclosure: Trafalgar Investment Advisers LLC Model Portfolio has a long position in this fund).
For a full breakdown of India’s gross domestic product as reported by India’s Central Statistical Organisation click the following link: ESTIMATES OF GROSS DOMESTIC PRODUCT FOR THE FIRST QUARTER (APRIL-JUNE) OF 2009-10
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