EW DELHI: India's economy grew a faster than expected 5.8 percent in the March quarter from a year earlier, as a still strong services sector
The annual growth for India's fiscal fourth quarter was above a median forecast of 5.2 percent in a Reuters poll, but sharply lower than the year-ago quarter's 8.6 percent expansion.
The manufacturing sector contracted 1.4 percent in the January-March quarter from a year earlier, while farm output grew an annual 2.7 percent, government data showed on Friday.
For the full year, India's economy grew 6.7 percent in 2008/09, sharply slower than the 9.0 or more in the previous three years. The FY09 projection was 7.1%
Farm sector growth has been revised to 1.6% vs 2.6% earlier.
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GDP beats expectations, fuels recovery hopes
EW DELHI: Economy grew faster than expected in the March quarter, helped by strength in farm and services sectors that suggested Asia's
"The economy has clearly performed better than expectations despite very challenging credit conditions," said Han-Sia Yeo, currency and rates strategist at Australia and New Zealand Banking Group in Singapore.
The economy grew 5.8 per cent from a year earlier in January-March, matching the upwardly revised rate in the previous quarter, data showed on Friday. That was still the lowest in four years, but above analysts' forecast of a 5.2 per cent annual expansion.
October-December growth was revised from 5.3 per cent. India does not publish seasonally-adjusted quarter-on-quarter growth figures, but analysts' estimates showed the economy grew 1.2 per cent in the quarter compared with a stagnant reading in September-December.
In the whole of the 2008/09 fiscal year to March 31, economy grew 6.7 per cent, its weakest in six years and well below rates of around 9 per cent of the previous three years, but still faster than predicted by economists in a Reuters poll.
The data fanned hopes that India was already on the mend, unlike other major economies that suffered a disastrous January-March quarter and have yet to show hard evidence of improvement.
Unlike most Asian economies, which heavily rely on exports to sustain economic growth, India is driven by domestic demand. But it still suffered a sharp slowdown in late 2008 as job cuts at exporters and outsourcing firms as well as the drying up of investment flows soured consumer and business sentiment.
Exports account for only about 15 per cent of India's GDP, less than half the levels in China and Japan.
"I think the GDP upgrade cycle has just started. We are past the eye of the storm," said Rajeev Malik, economist with Macquarie Capital in Singapore.
MARKETS CHEER
Indian stocks jumped more than 3 per cent and the rupee and bond yields also rose as the numbers boosted investor confidence about India's outlook and suggested the central bank may be finished with interest rate cuts.
"I think policy rates have bottomed out so the next move for the policy rate is upwards," said A Prasanna, chief economist at ICICI Securities primary dealership in Mumbai, who predicted rates would stay on hold over the next 6-9 months.
March quarter growth was only slightly below the 6.1 per cent expansion reported by China, Asia's second-largest and the world's third-largest economy, which for years has served as the world's main growth engine.
Central bank expects growth of about 6 per cent for the whole of current 2009/2010 fiscal year.
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Mkts end strong on good GDP nos, hopes of free fuel pricing
he benchmark indices showed spectacular performance on the first day of June series. Positive announcements from the oil ministry about deregulation of oil prices and better-than-expected GDP (Gross Domestic Product) numbers elevated the confidence level among the investors and helped the markets to remain on the higher side.
Good global cues also aided the positive momentum. Infrastructure (capital goods + power), oil & gas, metal, realty, auto, telecom and technology stocks witnessed huge buying interest.
Better-than-expected GDP numbers cheered the markets; Growth number for the full year, FY2008-09, came in at 6.7% versus a projection of 7.1%. The GDP growth for the last financial year, FY08, stood at 9%. The numbers for the fourth quarter of FY09 also came in at 5.8% versus 5.8% last quarter and 8.8% a year ago. A CNBC-TV18 poll conducted earlier saw the fourth quarter GDP number at 5.24% and for the full year, for FY09 the poll saw GDP to be at 6.52% as against 9% last year.
The oil ministry said that deregulation of oil prices would be taken up by the Cabinet soon and added that tax breaks for gas production would also be taken up shortly. The Ministry said it planned to re-launch New Exploration Licensing Policy (NELP) VIII soon. The Ministry further stated that it would consider the decontrol of APM gas after the oil product deregulation.
Speaking on the impact, VK Sharma of Anagram Sharma said. “I think it is worthwhile and it will give oil marketing companies as well as ONGC and GAIL some levy from having to bear the burden. The government too will not have to do that much. So I think it augers well for not only marketing companies but the others also for ONGC and GAIL.”
The 30-share BSE Sensex surpassed the 14,700 during the day and touched an intraday high of 14,727.28, up 431.27 points. But the some profit booking at higher levels wiped out some gains. It closed 329.24 points or 2.3% higher at 14,625.25. The 50-share NSE Nifty surged 150.95 points to touch a high of 4488.05, before closing at 4448.95, up 2.58% or 111.85 points.
ONGC, Reliance Industries, NTPC, DLF, Bharti, TCS, SAIL, L&T, SBI, BHEL, Wipro, Reliance Communication and Tata Steel were leading contributors in today's gain.
The benchmark indices showed spectacular performance on the first day of June series. Positive announcements from the oil ministry about deregulation of oil prices and better-than-expected GDP (Gross Domestic Product) numbers elevated the confidence level among the investors and helped the markets to remain on the higher side. Good global also aided the positive momentum. Infrastructure (capital goods + power), oil & gas, metal, realty, auto, telecom and technology stocks witnessed huge buying interest. the markets; Growth number for the full year, FY2008-09, came in at 6.7% versus a projection of 7.1%. The GDP growth for the last financial year, FY08, stood at 9%. The numbers for the fourth quarter of FY09 also came in at 5.8% versus 5.8% last quarter and 8.8% a year ago. A conducted earlier saw the fourth quarter GDP number at 5.24% and for the full year, for FY09 the poll saw GDP to be at 6.52% as against 9% last year. be taken up by the Cabinet soon and added that tax breaks for gas production would also be taken up shortly. The Ministry said it planned to re-launch New Exploration Licensing Policy (NELP) VIII soon. The Ministry further stated that it would consider the decontrol of APM gas after the oil product deregulation. Speaking on the impact, VK Sharma of Anagram Sharma said. “I think it is worthwhile and it will give oil marketing companies as well as ONGC and GAIL some levy from having to bear the burden. The government too will not have to do that much. So I think it augers well for not only marketing companies but the others also for ONGC and GAIL.” The 30-share BSE Sensex surpassed the 14,700 during the day and touched an intraday high of 14,727.28, up 431.27 points. But the some profit booking at higher levels wiped out some gains. It closed 329.24 points or 2.3% higher at 14,625.25. The 50-share NSE Nifty surged 150.95 points to touch a high of 4488.05, before closing at 4448.95, up 2.58% or 111.85 points. ONGC, Reliance Industries, NTPC, DLF, Bharti, TCS, SAIL, L&T, SBI, BHEL, Wipro, Reliance Communication and Tata Steel were leading contributors in today's gain. On the next page |
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- Mkts end strong on good GDP nos, hopes of free fuel pricing
- Govt walks the reform talk, to fast-track oil deregulation
- Farm output, govt spend power FY09 GDP growth to 6.7%
 | India's GDP up 6.7% in FY09 despite slow industry growth |
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