Analysts are expecting an higher dataprint for the September quarter GDP that will be announced tomorrow, with some of them pegging it at 6.4 per cent, after the disappointing performance in the preceding quarter.
"The first quarter growth at 5.7 per cent--a three- year low--did cause a lot of heartburn, but we strongly believe that Q2 growth is likely to trend higher and might be in at 6.3-6.4 per cent (gross value added at 6.1-6.2 per cent) with a downward bias," economists at SBI said in a note today.
Their optimism comes from the improving macroeconomic indicators across sectors, especially those affected by the note-ban that had dragged down the June quarter numbers.
Growth had slid to a three-year low of 5.7 per cent for the three months to June on the spillover effects of the note ban and the GST implementation.
Economists with Singaporean brokerage DBS also expect the headline growth to accelerate to 6.4 per cent for the second quarter, but cut its forecast for the full year 20 bps to 6.6 per cent largely on the dismal first quarter.
British brokerage HSBC had yesterday forecast a 6.3 per cent print on a gross value added (GVA) basis on a jump in industrial growth.
Blaming the dismal Q1 slowdown due to poor consumption demand, contraction in manufacturing due to GST disruptions, and declining in mining activity, SBI economists said recent macroeconomic indicators point to an overall recovery.
It pointed out the 10-month high manufacturing output in September at 3.4 per cent, mining at a five-month high of 9.4 per cent and electricity production grew 7.9 per cent.
It also used the earnings data from over 2,700 corporates to paint an optimistic picture and specifically mentioned the air transport sector where companies have posted a 28 per cent rise in revenues.
It can be noted that the slowdown in the growth activity had led a concerned government to declare that it is looking at multiple ways of upping the activity, including through a growth stimulus.
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