MUMBAI: The economy likely grew by 6.2-6.3% in the December quarter, amid rising global uncertainties, according to a Wednesday report released by SBI Research. While this growth rate is lower compared to the 8.6% growth recorded in the same period last year, it is still higher than the previous quarter, when growth had slumped to a seven-quarter low of 5.4%.
The official growth numbers will be announced by the National Statistical Organisation (NSO) on February 28. So far this fiscal, the economy has grown at a low 6.02% as the Q1 numbers surprised on the negative with a growth of 5.4% which was a seven-quarter low and down from the 8.1% in the year-ago period. This led to a rash of downward revisions led by RBI, which in December slashed its own growth forecast by 60 bps to 6.6%. In Q1 GDP grew at 6.7% but vastly down from 8.2% a year ago.
The SBI report stated that the said by 6.2-6.3% was driven by stable rural economy, consistent wage growth, and strong agricultural performance. The report said the likely higher growth comes despite global geopolitical uncertainties and disruptions in trade and supply chains.
Projecting a GDP growth of the December quarter, it also said that for the full fiscal ending March, the economy is likely to grow at 6.3%, which is among the lowest and 30 bps lower than the RBI projection.
"Impinging upon our in-house developed ‘nowcasting model’ that tracks 36 high-frequency indicators, we estimate that the economy would have grown 6.2-6.3% in the December quarter. Presuming no major revisions announced in the Q1 and Q2 figures by the NSO, we estimate the full-year GDP at 6.3%," SBI said in the report Wednesday.
The report said the high frequency indicators showing acceleration has increased to 74% in Q3 from 71% in Q2 and attributed the momentum to a healthy rural economy, which has been reinforcing stability across other sectors, consistent rural wage growth, along with higher rabi crop sowing.