The new series for industrial production and wholesale prices suggest that the GDP numbers for financial year 2016-17 could be revised up from 6.7 per cent to 7.4 per cent, says a Nomura report. The Central Statistical Office (CSO) revised India’s wholesale price index (WPI) and industrial production (IP) series last week, changing the base year to 2011-12 (from 2004-05).
Industrial production is an input in estimating gross value added for the unorganised manufacturing sector, while WPI is used as a deflator for deriving real GVA values from nominal data.
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“We estimate that GVA growth will be revised up to 8.2 per cent (from 7.8 per cent) for 2015-16 and to 7.4 per cent (from 6.7 per cent) for 2016-17,” Nomura said in a research note.
The GDP numbers are scheduled to be released on May 31.
The report further said that 2016-17 GDP growth may also be revised up to 7.8 per cent (from 7.1 per cent in the second estimate), with both consumption and investment growth likely to see upward revisions.
The revisions will also impact the quarterly growth profile.
Based on the older series, Nomura expects GDP growth to slow to 6.7 per cent in the first quarter of 2017 from 7 per cent in the fourth quarter of 2016.
“We forecast GVA growth to slow to 6.8 per cent in the first quarter of 2017 from an upwardly revised 7.3 per cent in Q4 2016,” Nomura said, adding “overall, the revisions will show a more positive growth outlook”.