'GDP numbers on expected line, recovery to be moderate'
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'GDP numbers on expected line, recovery to be moderate'

Last Updated: Friday, May 31, 2013, 21:26
 
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'GDP numbers on expected line, recovery to be moderate'
Mumbai: The weak GDP growth numbers released Friday were on expected lines and any recovery going forward would be moderate, rating agencies and brokerages said.

"The numbers come in line with expectations," ratings agency Care Ratings said in a note.

Another agency Icra observed that GDP growth is expected to post a mild revival in FY 2014.

Crisil stated that unless specific measures are taken, an investment-led recovery seems "a tall order".

"GDP growth is expected to post a mild revival to 5.8-6.0 percent in FY 2014, despite anticipation that a normal monsoon and monetary easing would boost consumption growth," Icra said in a statement.

Concerns related to availability of inputs, clearances and high leverage levels are likely to keep private investment muted, it added.

Official data released earlier in the day suggested that growth has fallen to a decade low of 5 percent for 2012-13.

Crisil said the growth came in lower because of the 3 percent contraction in mining, the slower growth of 2.8 percent in utilities sector which includes electricity, gas and water supply, and the lower than trend growth in agriculture of 1.4 percent.

Going forward, Crisil said, unless specific measures are taken to revive activity in mining and power, an investment-led recovery seems "a tall order".

Care Ratings estimated the growth to come in at 5.7 percent on the conservative level, saying the same may rise up to 6.4 percent on the optimistic side.

Consultancy firm Deloitte's senior economist Anis Chakravarty said it is difficult to conclude if growth has indeed bottomed out yet, though the growth number for the first quarter of fiscal year 2013-14 will show an improvement.

Foreign brokerage HSBC said the mild growth recovery will not be noticeable and the second half of the fiscal will be more promising on the growth front.

The recovery, it noted, "is contingent on a resumption of structural reforms and improved global economic conditions."

In a note, its peer Barclays said it is holding on to the expectation of 6 percent growth for the fiscal, a major chunk of which coming in the second half of the fiscal.

Barclays, however, added that the improvement to 6 percent should be "interpreted as a move towards normalisation, rather than a meaningful improvement in underlying economic momentum."

PTI



First Published: Friday, May 31, 2013, 21:26


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