Showing signs of turnaround, industrial production grew by 2.7 per cent in August, reversing the trend of contraction witnessed during the previous two months.
"GDP growth for the quarter ended September 2012 and December 2012 will be sub-5 per cent, as weak agriculture and the slowdown in external demand hamper growth," Morgan Stanley said in a research note.
The pick-up in industrial production in August has been largely factored in our GDP growth estimates and the country is likely to clock a GDP growth of 5.1 per cent this fiscal, the report added.
Morgan Stanley believes that the factors responsible for the weak GDP growth include poor agricultural growth, weak investment trend, sluggish domestic market growth outlook and weakness in the service sector.
Bank of America Merrill Lynch in a research note earlier this month had noted that lead indicators still point to six months of pain and it is not until the March quarter that growth is expected to recover to 6.5
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