The Indian economy grew 7.7 per cent year-on-year in January-March, its quickest pace in nearly two years driven by higher growth in manufacturing, the farm sector and construction.
The figure surpassed Chinas growth rate of 6.8 per cent in the January-March quarter, confirming India as the fastest growing major economy, Reuters reported.
For the fiscal year that ended March 31, the Ministry of Statistics reported growth of 6.7 per cent, down from 7.1 per cent for a year earlier. However, economists expect growth to be robust in the current financial year, the agency added.
Here's how economists and Dalal Street analysts reacted to the growth print:
Aditi Nayar, Principal Economist, ICRA
GDP and GVA growth for Q4 FY2018 printed at higher than anticipated levels, providing a positive surprise, and confirming that an economic recovery is underway. The uptick in economic activity benefitted from the healthy rabi harvest, robust volume growth in various sectors, an improvement in corporate earnings, as well as a favourable base effect related to the low growth in Q4 FY2017.
However, the downward revisions for the earlier quarters of FY2018 have prevented the full year growth estimates from exceeding our forecasts.
Ranen Banerjee, Partner and Leader – Public Finance and Economics, PwC India
The high growth rate reported in quarter is on expected lines for us as the high frequency data on PMI and IIP as well as rural demand were all indicating a revival. We should however be wary of the headwinds the economy faces in the coming quarters from higher crude prices feeding into inflation and rising inflation expectations. We hope the Monetary Policy Committee would not press the panic button that could create further friction on growth rate and would continue to hold on to the interest rates
Sampath Reddy, CIO, Bajaj Allianz
GDP growth Q4 FY18 came in above expectations at 7.7%, on the back of gross fixed capital formation (or investments).
With this, India remains on track to grow at above 7% in FY19, and emerge as the fastest growing major economy in the world. Some headwinds do remain from the perspective of rising crude oil prices, and unwinding of global easy monetary policy & rising interest rates. Investors should continue to invest systematically in equities, with our preference being for large-cap funds.”
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