Q1GDP: HDFC Bank's Baruah wary of trade & hotels data

Gross domestic product (GDP) for the first quarter of the fiscal fell to 4.4 percent against market expectations of 4.7 percent. Abheek Baruah, chief economist at HDFC Bank feels the trade and hotel services component disappointed the most, which indicates a decline in consumption demand. "We will have to revise our overall GDP expectations for FY14 to sub five percent", he told CNBC-TV18.

Also read: Investors have not lost faith; 3% GDP fear unfounded: PM Below is the edited transcript of his interview to CNBC-TV18. Q: What were you expecting? What is the highlight of the break up? A: We were expecting 4.7 percent. The two surprises that we have had again are trade and hotels. These components of services were assumed to be somewhat higher than this. We were a little more aggressive on the construction area- not significantly more than this. So, those are the two disappointments we find in these numbers. The bottomline is that the trade and hotels component is a major constituent. It correlates very well with retailing. It ultimately feeds into the private final consumption expenditure from the expenditure side. This is some indication that consumption demand is also sort of declining, which is alarming given that investments are certainly not picking up. We will have to revise our overall GDP numbers for the year down. We have 5.2 percent now; perhaps it could even be sub 5 percent for the full year.