The Indian economy is expected to have grown by 5.5 per cent during the October-December quarter of this financial year drawing support primarily from the services sector, says a report.
"We expect the GDP to have grown by 5.5 per cent during third quarter of FY15 drawing support primarily from the services sector," Dun & Bradstreet said in a research note.
The report however, noted that the biggest segment of the services sector -- trade, hotels, transport and communications -- is yet to witness a turnaround.
India's gross domestic product growth, which had fallen under 5 per cent, is expected to be between 5.4 per cent and 5.9 per cent this fiscal.
The country's GDP expanded 5.3 per cent in the September quarter, slower than the 5.7 per cent pace in the preceding June quarter.
"There has been some encouraging news on the economic front with the IIP turning positive and December retail inflation below the RBI's target," Dun & Bradstreet India
Senior Economist Arun Singh said but added that ‘it may be too early to infer that these indicators herald the onset of a recovery in the economy.’
D&B expects growth in index of industrial production to remain in the positive territory. IIP is likely to have grown by 1-1.5 per cent during December 2014, it said.
On the inflation front, fall in global crude oil prices would undoubtedly provide support to the WPI trajectory, inflation in protein items remains a key risk for the food inflation, the report said.
It expects the WPI inflation to increase by 0.5 per cent -- 1 per cent during January 2015.
"The announcements in the Union Budget for FY16 with regard to Government finances and policy reforms will determine if the current momentum can be sustained in the near future," Singh said.
Image: A child sells Indian flags on a road in Mumbai. Photograph: Reuters
