News APP

NewsApp (Free)

Read news as it happens
Download NewsApp

Available on  gplay

This article was first published 9 years ago
Home  » Business » Growth weaker than GDP numbers suggest, warns Rajan

Growth weaker than GDP numbers suggest, warns Rajan

By Neha Dasgupta and Swati Bhat
Last updated on: June 02, 2015 12:16 IST
Get Rediff News in your Inbox:

Rajan also said weak results from India's corporate suggested final demand is yet to pick up strongly

India's growth rate may be weaker than headline numbers suggest and demand has yet to pick up strongly, the governor of the Reserve Bank of India said after the bank's policy meeting on Tuesday.

Official data last week showed Asia's third-largest economy grew 7.5 per cent year-on-year in the previous quarter, outstripping China's 7 per cent growth in the same quarter and beating a Reuters poll of economists who forecast 7.3 per cent.

"Even with the 7.5 per cent growth numbers, there is some discussion of how much that includes special factors in the last quarter, including excise taxes and subsidy. And so when you subtract that, the growth in the last quarter doesn't look as strong as before," Governor Raghuram Rajan said.

"And so, you could point to those numbers also suggesting growth is weaker than at least the headline numbers suggest."

Rajan also said weak results from India's corporates suggested "final demand is yet to pick up strongly".

Monsoon outcome the biggest uncertainty

Rajan said the biggest uncertainty ahead was the outcome of the annual monsoon, after the rains missed their normal start date, along with subsequent government action.

"Each path of the sequence is fraught with uncertainty. So we need to figure out how this plays out. And, clearly government action is very important," Rajan said after the central bank's policy meeting on Tuesday.

Photograph: Reuters

Get Rediff News in your Inbox:
Neha Dasgupta and Swati Bhat
Source: REUTERS
© Copyright 2024 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.
 

Moneywiz Live!