Moody's analysts expect India's economy to grow at 3-year high of 6% in Q3

Official numbers for the December quarter to be released on Monday

Moody’s Analytics, a research firm of the Moody’s group, on Friday projected India’s economy to grow by six per cent in the October-December period of 2014-15. Official data for the quarter is to be released on Monday.

“An upturn in fixed investment should drive better GDP (gross domestic product) growth,” Moody’s Analytics said.

If the rate of growth in the quarter is six per cent, it will be the highest since the December quarter of 2011-12 — a three-year high.

Moody’s estimates are based on the older definition of gross domestic product (GDP) and 2004-05 as the base year. After some recent changes in calculation methodology, 2011-12 has now been set as the new base year and GDP, unlike the earlier method, includes indirect taxes net of subsidies.

On Monday, the government will release advance estimates for 2014-15, as well as for the first three quarters of the current financial year — on the basis of the revised methodology.

By older computation, India’s GDP grew 5.7 per cent in the June quarter and 5.3 per cent in the next, aggregating 5.5 per cent growth in the first half of the year.

However, gross  fixed capital formation, a proxy for investment, grew at a slower pace of 0.02 per cent in the September quarter, against over seven per cent in the June one. 

On new GDP numbers, Moody’s Analytics said it was still digesting the details and the numbers to be released on February 9 would provide further clues on where the economy currently stands.

By revised methodology, India’s GDP growth was revised to 5.1 per cent for the June quarter and 6.9 per cent for the September quarter of 2014-15.