>GDP (EDELWEISS)

U-turn strengthens

■ Q1FY10 GDP meets expectations
India’s real GDP growth during Q1FY10 came in at 6.1% Y-o-Y, meeting expectations (consensus: 6.2%). This stands a tad higher than the 5.8% growth recorded during the previous two quarters and directly reflects a pick-up in industrial and construction activity which had experienced a slump in the previous two quarters.

■ Manufacturing, trade, financial services growth stand out
Industry demonstrated impressive recovery: 5% Y-o-Y against a decline of 0.5% last quarter. Industrial growth during this quarter was broad-based across mining (7.9%), manufacturing (3.4%) and the electricity, gas and water supply group (6.2%). Improved activity in the construction sector was an additional support. After modest performance in H2FY09, the sector has witnessed sustained pickup (7.1% growth this quarter vis-à-vis 5.5 % in H2FY09).

Bulk of the services sector is showing steady-to-improved sequential quarterly growth in Q1FY10. Community, social and personal services had been the only major sub-group that had recorded somewhat subdued growth. This subsegment, however, is also expected to exhibit higher growth rates in the subsequent quarters (with pending disbursement of remaining part of the Sixth Pay Commission awards from the central government, followed by state governments and PSUs).

Growth in the agricultural sector stood at 2.4% against 2.7% in the previous quarter and 3.0% in the corresponding quarter previous year. The current farm growth numbers do not reflect any deceleration on account of a poor monsoon, but are likely to reflect in the coming two quarters.

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