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>GROSS DOMESTIC PRODUCT (FIRST GLOBAL)
The government expenditure driven growth (47% of incremental
GDP) was expected, but…
...some of the most sensitive sectors, such as trade, hotels, banking &
real estate, show rather unnatural resilience…
…while downward revision to Q4 FY08 numbers for few sectors
inflates their Q4 FY09 growth rates…
…Net Exports make a positive contribution as imports fall more
The Story…
India’s much-awaited GDP for Q4 FY09 came in at 5.8%, which was equal to the upwardly revised figure of 5.8% (from 5.3%) recorded in Q3 FY09, much higher than expected. The GDP growth for FY09 stood at 6.7%, which was not much lower than the official estimate of 7.1% - which was considered absurdly high. Interestingly, India was the only country in the world that did not record a slowdown in its real GDP in the January-March 2009 quarter over the October-December 2008 quarter. Even China, the world’s fastest growing economy, recorded a slower growth (6.1%) in the January-March 2009 quarter, as against the growth (6.8%) in the October-December 2008 quarter.
The better-than-expected GDP numbers for Q4 FY09 have undoubtedly come as a surprise even to us, though most of the improvement appears to have come on the back of government consumption expenditure and its stimulus packages to various sectors. In this report, we have analysed India’s Q4 FY09 real GDP numbers using two available methods – the output method and the expenditure method. The corresponding sectors reflecting the government spending in two ways are community, social & personal services using the output method and Government Final Consumption Expenditure (GFCE) using the expenditure method. These increased by 12.5% and 21.5% respectively (Y-o-Y), contributing 30.2% and 47.3%, respectively to the incremental GDP in Q4 FY09. Apart from this, some sectors, particularly agriculture and construction, were able to record a good growth due to the downward revision in the numbers for Q4 FY08. Though our estimated GDP of 4% in Q4 FY09was far lower than the actual number, the only positive variances were in services, as all the other numbers were lower than our estimates. Based on the GDP numbers, we have also revised our FY10 GDP numbers, which, however, could be significantly impacted by the Budget to be presented in July 2009 – at which point we may revisit the estimates.
To see full report: GDP
GDP) was expected, but…
...some of the most sensitive sectors, such as trade, hotels, banking &
real estate, show rather unnatural resilience…
…while downward revision to Q4 FY08 numbers for few sectors
inflates their Q4 FY09 growth rates…
…Net Exports make a positive contribution as imports fall more
The Story…
India’s much-awaited GDP for Q4 FY09 came in at 5.8%, which was equal to the upwardly revised figure of 5.8% (from 5.3%) recorded in Q3 FY09, much higher than expected. The GDP growth for FY09 stood at 6.7%, which was not much lower than the official estimate of 7.1% - which was considered absurdly high. Interestingly, India was the only country in the world that did not record a slowdown in its real GDP in the January-March 2009 quarter over the October-December 2008 quarter. Even China, the world’s fastest growing economy, recorded a slower growth (6.1%) in the January-March 2009 quarter, as against the growth (6.8%) in the October-December 2008 quarter.
The better-than-expected GDP numbers for Q4 FY09 have undoubtedly come as a surprise even to us, though most of the improvement appears to have come on the back of government consumption expenditure and its stimulus packages to various sectors. In this report, we have analysed India’s Q4 FY09 real GDP numbers using two available methods – the output method and the expenditure method. The corresponding sectors reflecting the government spending in two ways are community, social & personal services using the output method and Government Final Consumption Expenditure (GFCE) using the expenditure method. These increased by 12.5% and 21.5% respectively (Y-o-Y), contributing 30.2% and 47.3%, respectively to the incremental GDP in Q4 FY09. Apart from this, some sectors, particularly agriculture and construction, were able to record a good growth due to the downward revision in the numbers for Q4 FY08. Though our estimated GDP of 4% in Q4 FY09was far lower than the actual number, the only positive variances were in services, as all the other numbers were lower than our estimates. Based on the GDP numbers, we have also revised our FY10 GDP numbers, which, however, could be significantly impacted by the Budget to be presented in July 2009 – at which point we may revisit the estimates.
To see full report: GDP
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