MUMBAI (Reuters) - The Indian economy grew a higher-than-expected 4.8 percent in the three months through September, helped by an uptick in agriculture and construction, government data showed on Friday.
Analysts polled by Reuters had forecast growth of 4.6 percent. September's figure percent was the fourth successive quarter of economic growth below 5 percent.
UPASNA BHARDWAJ, ECONOMIST, ING VYSYA BANK, MUMBAI:
"The GDP data has more or less been in line with expectations suggesting that the slowing cycle has bottomed. While some lead indicators do point towards stability going forward, we still need more evidence to conclusively call for a sustained revival."
"From a policy perspective, today's GDP print is unlikely to change the course of action by the Reserve Bank of India.
"While inflation continues to remain above comfort levels, we expect RBI to pause in the forthcoming meeting and closely monitor the impact of the harvest on food prices, which should feed into the inflation numbers from the next month's reading."
SHAKTI SATAPATHY, FIXED INCOME STRATEGIST, AK CAPITAL, MUMBAI
"The visible improvement in the Q2 FY 14 number was primarily because of good agricultural growth followed by rise in electricity and manufacturing outputs.
"We expect further improvement on the headline growth due to the above mentioned factors in the coming quarters.
"Though a good monsoon and favourable current account deficit would boost the numbers in the second half of the fiscal, a higher inflation coupled with political uncertainty are perceived to be near-mid term bottlenecks in improving the fundamental growth drivers and investment scenarios in the economy."
RUPA REGE NITSURE, CHIEF ECONOMIST, BANK OF BARODA, MUMBAI:
"The GDP growth is being driven primarily by agriculture and construction.
"Manufacturing is a tad better but to have a growth of 5 percent for the full year, the second year growth has to be in the band of 5.5 to 5.8 percent, and that depends on how the rabi (winter-sown) crop pans out and with what speed the government further clears stalled projects.
"We also need to see after the clearance with how much lag the activity actually starts at the ground level. I don't expect the RBI to loosen monetary policy in any way, and today's data is in a way supportive of a tighter monetary stance and gives the RBI some cushion to continue with its anti-inflationary stance."
SHUBHADA RAO, CHIEF ECONOMIST, YES BANK, MUMBAI:
"The important takeaway from this is private consumption still remains tepid, and the government's consumption expenditure has declined, so clearly the compulsion of adherence to fiscal target has prompted the government to bring the curb on expenditure early on and that's what is visible.
"Going forward, we see robust agriculture output in the third quarter, given the cues from Q2. So as such, it will lend support to consumption revival and recovery in the third and fourth quarter. We continue to maintain 4.9 percent for the full year.
"The RBI rate decision will be contingent on incoming inflation data, though we anticipate incremental softening of food prices month-on-month, but the headline inflation both CPI and WPI may range around 10 percent and 7 percent respectively.
"However, incremental behaviour of prices may also provide some comfort to the RBI so we do not see a rate hike necessarily being executed in December while we do anticipate a 25 basis points rate hike in January."
(Reporting by Mumbai markets team)
