Analysts project India’s Q2 growth at 4.5-5.5%

India's economy is expected to grow at rates varying from 4.5 per cent to 5.5 per cent during the July-September 2013 quarter, according to various projections by economists and analysts.

While rating firm Moody's pegged india's GDP growing at 4.5 per cent in the second quarter of the current financial year, Deutsche Bank expects it to grow at 5.5 per cent.

A consensus estimate by homegrown rating agency ICRA puts India's Q2 2013-14 GDP growth at 4.6 per cent amidst continued sluggish run of the economy.

Official GDP estimates for the September quarter are slated to be released on Friday.

''Some pick-up in industrial activity, along with support from the farm sector, may lead to growth higher than that observed in the previous quarter,'' said D K Joshi, chief economist at Crisil.

Joshi, who expects GDP to have grown 4.7 per cent during the second quarter, estimates growth in the agricultural sector at 4.5 per cent.

''Looking at a lower base, this is not that good a figure,'' he says. In the corresponding quarter last year, the sector had grown just 1.7 per cent.

Aditi Nayar, senior economist at ICRA Ratings, has pegged GDP growth in the September quarter at 4.6 per cent.

She said the true impact of the agricultural sector would only be seen in the third quarter. She projects farm sector growth in the September quarter at 3.8 per cent.

''Kharif crops are usually harvested in October, and the major benefit to agricultural growth following the healthy monsoon in 2013 would be seen in the quarter ending December.''

Typically, the share of farm output to GDP was the least in the second quarter and the highest in the third quarter, she said.

The good rains might have had some beneficial impact on horticulture, livestock, fisheries, etc, in quarter ended September, too, she added.

Madan Sabnavis, chief economist, CARE Ratings, said economic growth during the quarter would stand at 4.8 per cent. ''This would come on the back of government spending in this phase, reflected in the staggering fiscal deficit numbers,'' he said, adding he expected the social and personal spending segment of the services sector to increase 8.4 per cent in the second quarter, and the overall services sector to grow 6.2 per cent.

''This is, however, quite low compared to the traditional growth of eight per cent in the sector,'' Sabnavis said.

From here, services sector growth would deteriorate further, with a cut in government spending in the coming quarter, he said. ''Unless there is no compensation for sub-sectors, there will be no upturn in the sector.''

Economists said though there was a slight revival in the demand, the improvement on the investment front wasn't substantial.

Moody's Analytics pegged GDP growth in the September quarter at 4.5 per cent.

The research wing of Moody's Group said, ''GDP growth in the second quarter cooled to its slowest pace in four years, as production slowed across most parts of the economy.''

It attributed the sluggish numbers to a continued bleak performance in manufacturing and construction. It added during the September quarter, the slowdown had gripped the services sector, too.

Deutsche Bank, however, remained bullish on the economy, estimating GDP growth at 5.5 per cent for the September quarter, primarily due to better industrial performance and higher agricultural income during this period.

''While expectations remain poor, we estimate real GDP grew 5.5 per cent during the quarter, the best performance in a year,'' the global banking and financial services firm said in a note.

Deutsche Bank said there was a modest revival in the industrial and construction sectors, finance and trade looked buoyant and public spending had picked up.

''Factoring in these inputs, we estimate industrial sector to have grown 1.8 per cent in the September quarter, against (-) 0.9 per cent growth in the previous quarter,'' said a Deutsche Bank note.

The bank predicted the service sector, which had the largest share in GDP, grew seven per cent in April-September, while the non-farm sector expanded 5.9 per cent during this period.

Despite talking of a healthy agricultural performance, the bank pegged farm sector growth at a mere two per cent.

In 2012-13, India's GDP grew at a decade-low of five per cent, with the last two quarters seeing sub-five per cent growth. In the first quarter of this financial year, the economy expanded at a four-year low of 4.4 per cent.

India's overall GDP is expected to have grown at around 4.5 per cent during the second quarter of the current fiscal year (FY14), according to a Dun & Bradstreet report.

The GDP is further likely to remain weak during the remaining period of FY14. According to the US-based research firm, the country's economic growth rate in the quarter ended September, 2013 is likely to be around 4.5 per cent.

This is marginally higher than 4.4 per cent economic growth recorded in the previous quarter (April-June) of FY14.

The country's economic growth hit a decade-low of 5 per cent in the last fiscal year (FY13) on account of poor performance in the farm, manufacturing and mining sectors.

"With almost three quarters of FY14 behind us, inflationary pressures remain unabated, manufacturing sector fails to revive, fiscal deficit continues to rise and the domestic private sector consumption continues to weaken," Dun and Bradstreet India senior economist Arun Singh said.