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Monthly GDP growth in India accelerated to 5.4 pct in November, 2013: ZyFin Research

Jan 24 2014, 13:45 IST
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This is also the second-highest growth witnessed since January 2012, when growth of 5.7% was recorded. Reuters This is also the second-highest growth witnessed since January 2012, when growth of 5.7% was recorded. Reuters
SummaryServices sector growth drives uptick in GDP growth in India, supported by declining inflation.

Estimate of monthly GDP growth in India – a barometer of India’s economic health puts the figure at 5.4% in November 2013 (year-on-year [YoY]) - monthly GDP has moved up from 5.2% in October 2013, showing a steady uptrend in economic growth for the sixth consecutive month.

This is also the second-highest growth witnessed since January 2012, when growth of 5.7% was recorded.

The ZyFin mGDP is India’s first and only estimate of India’s GDP numbers on a YoY and sequential month-on-month (MoM) basis, with seasonal adjustments, as is done in most developed economies.

The mGDP growth can be attributed to early signs of improvement in the service sector, coupled with decline in the inflation rate – our estimates suggest inflation for December would be 7.3%.

Dr Surjit S Bhalla, Senior Advisor, ZyFin Research, said, “In addition to growth, the big story for the Indian economy is inflation. In our December report, we had suggested that inflation had peaked in October. Monthly sequential data confirms that Indian inflation may finally be on a downward trend. The next few months will tell whether the six-year era of high inflation is coming to an end.”

Debopam Chaudhuri, VP Research, ZyFin Research, “The intensity and sustainability of the likely economic upturn depends largely on a recovery in consumer demand. The Consumer Outlook Index, which is a monthly barometer of consumer perceptions on employment, inflation and future spending, has been inching up since November, reflecting healing sentiment. If this strengthens further in the coming months, a demand-pulled economic recovery would follow.”


* ZyFin Research estimates GDP growth at 5.4% for November 2013, as compared to November 2012. The corresponding GDP growth estimate for October 2013 was 5.2%. Early signs of improvement in the service sector have contributed to the growth.

* This is also the 6th consecutive month of uptick in monthly GDP growth, from a low of 4.3% in June 2013.

* November MoM seasonally-adjusted growth was 4.9% (compared to October 2013). The sequential growth in October was 4.8% (compared to September 2013).

* Inflation, as measured by the GDP Deflator, declined marginally to 7.4%, from 7.5% in the previous month. The GDP deflator is a more comprehensive measure of underlying inflation and is widely used in developed economies.

* The inflationary situation, while still worrying, has moderated over the past three months.

Early estimates suggest inflation estimates for December would be lower, at 7.3%.

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