INDIA GDP PREVIEW: Services Drive Recovery, May Spur RBI to Hold
Source: BFW (Bloomberg First Word)
People
Anurag Jha (Citigroup Inc)
Devendra Pant (Fitch Ratings Ltd)
Devika Mehndiratta (Australia & New Zealand Banking Group Ltd)
Frances Cheung (Societe Generale SA)
Jason Daw (Societe Generale SA)
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UUID: 7947283
(Bloomberg) -- India’s economy may continue to show gradual recovery as the services sector lead growth, economists say, adding that RBI will likely keep rates on hold when it meets June 7.
Alert: HALISTER1- 1Q GDP growth est. 7.5% vs. 7.3% in prev; data due May 31 at 5.30pm local time
- GVA growth, another measure which RBI closely monitors, is likely to grow 7.3% in 1Q vs 7.1% prior
- RBI’s GVA growth projection for fiscal 2017 is at 7.6%
- NOTE: GDP is equal to GVA plus taxes minus subsidies
- USD/INR may trade between 50- and 100-DMA near term if 1Q GDP matches est.: Bloomberg analysis
- Barclays (economists including Siddhartha Sanyal)
- Economic activity continues to follow a path of gradual recovery
- Services sector growth likely inched up in 1Q, offsetting softer growth in manufacturing and agriculture
- Forecasts FY16 GDP growth of 7.5%; sees modest uptick to 7.8% in FY17; recovery could be uneven in coming quarters and occasional downside surprises can’t be ruled out
- Broadly favorable economic parameters, larger-than- expected easing in April, will prompt RBI to stay on hold on June 7
- Citi (Samiran Chakraborty & Anurag Jha)
- 1Q GDP is likely to reinforce growth optimism
- Real GVA growth is expected to improve to 7.8% in Jan- March, highest pace in six quarters
- Agricultural output could surprise positively despite second year of inadequate rainfall
- Services sector growth could largely stay unchanged given a pickup in financial services activity and govt expenditure
- ANZ (Devika Mehndiratta)
- Expect real GDP to have picked up to 7.8% y/y in 1Q with services sector likely to have led improvement; agriculture should also register positive growth
- Fair bit of uncertainty remains about quarterly GDP results as these are based more on corporate financial results and less on observables such as industrial production growth
- India Ratings & Research (Devendra Pant)
- Agricultural GVA growth can surprise positively, despite the second consecutive year of sub-par monsoon, mainly due to the unseasonal rainfall during 4Q FY15
- Industrial GVA growth is likely to have declined from 3Q FY16 level, but likely performed better than 4Q FY15; main support is driven by strong performance of electricity sector
- Societe Generale (Jason Daw & Frances Cheung)
- 1Q GDP should improve, maintaining INR’s favorite carry trade qualities
- Long INR is not stretched and as such short SGD/INR is still attractive on macro and technical grounds
Source: BFW (Bloomberg First Word)
People
Anurag Jha (Citigroup Inc)
Devendra Pant (Fitch Ratings Ltd)
Devika Mehndiratta (Australia & New Zealand Banking Group Ltd)
Frances Cheung (Societe Generale SA)
Jason Daw (Societe Generale SA)
To de-activate this alert, click here
UUID: 7947283