Q3 GDP surprises on the upside at 7 per cent

Putting all the notions of demonetisation impacting the GDP growth in the third quarter of FY17 to rest, the Central Statistics office in a release noted that the country’s growth domestic product for the third quarter came in at 7 per cent compared to the expectations of below 6 per cent growth.

The growth in GDP during 2016-17 is estimated at 7.1 per cent as compared to the growth rate of 7.9 per cent in 2015-16. The first three quarters of the current financial year has showed a growth rate of 7 per cent. The gross value added at constant prices in Q3, showed a healthy growth of 6.6 per cent.

On the sectoral front, the performances of agriculture, forestry and fishing came in at 6 per cent vs 3.8 per cent in the previous quarter, whereas, the mining and quarrying grew at 7.5 per cent vs (1.3) in Q2. The manufacturing sector also showed surprising results, as it grew by 8.3 per cent compared to 6.9 per cent in the previous quarter. Electricity, gas & water supply and other utility services grew by 6.8 per cent as against 3.8 in Q2. Construction saw a negative impact in the Q3 period, as it grew by 2.7 per cent vs 3.4 per cent in Q2.

The recent growth numbers are definitely on a positive side as against the negatives surrounded by the economist and experts. These numbers suggest little to no impact of demonetisation. The capital markets are expected to react positively to the numbers as it will allude all the fears surrounding the temporary slow-down in the country.

GDP numbers is expected to boost the government reform agendas going forward, and at the same time, will also be a shot in the arm of Modi-led NDA government, with the two phases of UP elections still to go.