India’s Q4 FY 14-15 GDP (January-March) grew 7.5% y/y (Barclays: 7.4%; consensus: 7.0%), as per the new FY 11-12 base. This was up from a downwardly revised 6.6% y/y growth in Q3 FY 14-15, and brings annual growth of 7.3% for FY14-15. This is only marginally below the advance estimate of 7.4% released earlier in February. Barclays says – “We continue with our 7.8% GDP growth forecast for FY15-16, indicating that a gradual recovery in led by better prospects in services and manufacturing sector. We expect agriculture growth to be somewhat muted, as volatile weather conditions have an impact on production.”In today’s data print, growth was largely driven by services, especially onshore trade & transportation and financial services. Manufacturing growth improved, in line with industrial production figures. Construction growth also improved, in line with greater public sector spending on roads & highways. On the expenditure side, investment demand continues to inch up, rising 4.1% y/y. “We expect public investment to improve in FY 15-16, as the government’s underlying fiscal position improves, while the fiscal deficit is kept in check. Private consumption improved as well, rising 7.9% y/y in Q4 FY14-15. Looking ahead, with government spending normalising and the subsidy bill falling, we expect GDP growth to maintain its gradual improvement path in coming months, largely from an uptick in public investment spending, while consumption is expected to improve at a gradual pace.” notes Barclays
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