Moody's projects July-September quarter GDP growth at 5.3%

Ratings agency Moody’s expects the country's gross domestic product (GDP) to grow at 5.3 per cent in the July-September quarter of the current financial, better than 4.8 per cent clocked in the year-ago period.

It said the general elections in May helped lift investor sentiment and business confidence, though it would take a while before this translated into better performance in the real economy.

“Our estimate that GDP grew 5.3 per cent in the September quarter is in line with the steady cyclical upswing of recent quarters,” Moody's Analytics said in a report.

The official GDP data for the September quarter will be released on Friday.

Indian economy grew by 4.8 per cent in the second quarter of the last fiscal, while the growth rate was 4.7 per cent for the entire 2013-14 fiscal. In the April-June quarter of this year, GDP growth stood at 5.7 per cent.

The growth rate touched sub-5 per cent in 2012-13 and 2013-14.

"The economy's growth reached a nadir around the middle 2013 but has been steadily improving since then," it said, adding, downside risks to growth diminished as the government shored up its fiscal position and external account.

Moody's Analytics further said the services sector would continue to expand strongly and drive GDP growth on the production side.

Investment will be key to second quarter performance as corporate spending appears to have expanded further and industrial production of capital goods was slower but still positive.