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Will the gross domestic product (GDP) numbers, scheduled to be out on Thursday, signal the long-awaited, much-anticipated, yet elusive recovery? GDP growth, at constant prices, has steadily declined every quarter from the eye-popping 9.1% reached in the March 2016 quarter to a tepid 6.1% in the March 2017 quarter.
Gross value-added (GVA) growth has followed a similarly unimpressive trajectory. Just as businesses were recovering from demonetization, the goods and services tax (GST) led to another bout of disruption, which will be a dampener for the June quarter. Are there offsetting factors?
Here are a few pointers to the GDP print on:
1) The base effect. Year-on-year GVA growth in the March 2017 quarter was 5.6%, on top of 8.65% growth a year ago. Growth in the June 2016 quarter was 7.56%. That should provide an optical boost to the June 2017 data (Chart 1). Other things remaining the same—although they rarely do—GDP and GVA growth should be higher than for the March quarter.
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