India's growth 'set to rival China' in 2011: Moody's
The outlook for India remains favourable, and growth looks set to equal China's in 2011, Robinson added. A return to solid growth in agriculture would complement strong expansion in services, propelling GDP growth towards the 9% mark.
March 01, 2011 / 14:28 IST
India's GDP growth rate, which came in at 8.2% year-on-year in the third quarter of FY 2010-11, looks set to rival China's in 2011, notes Moody's Analytics senior economist Matt Robinson.
This was the fourth successive quarter of GDP growth in excess of 8%, and "with strong population growth, rising exports and expanding services", India's growth rate looks set to rival China's in 2011, expected to head towards the 9% mark, he said in a note to clients. In Robinson's estimation, the drivers of growth in the December quarter were the finance, insurance, real estate and business services sectors, and the trade, hotel, transport and communications sectors.Exports grew 16.2% year-on-year, private consumption expanded 9% from a year earlier, while business investment grew 6%. Government expenditure was 3% lower than a year earlier, but Robinson points out that the expenditure breakdown is not considered as accurate a measure of GDP as the industrial measure, which remains the more widely reported figure.Although GDP growth slowed in the final quarter of 2010, it remained above 8% owing to continued strong growth in key service sectors, along with a long-overdue recovery in agricultural output. The services sector, which accounts for more than 55% of GDP, remained the primary growth driver in the final three months of 2010. Activity in the finance, insurance, real estate and business services sector expanded at double-digit pace, while trade, hotel, transport and communications activity recorded its sixth consecutive quarter of 8%-plus year-on-year growth. In contrast, Robinson noted, aggressive monetary tightening by the central bank was evident in slowdown in manufacturing output to 5.6% year-on-year in the December quarter, its slowest growth rate since mid-2009. An unexpected contraction in government expenditure was also responsible for the December quarter
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
