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Economy in Brief


by Carol Stone India GDP Accelerates in Q1; FY2006 Growth Most in 18 Years May 31, 2007

India's GDP surged ahead at a 15.6% annual rate in Q1, picking up vigorously from 4.6% in Q4. For the fiscal year 2006/07, which ended March 31, growth was 9.4%, the highest annual figure since fiscal 1988. Data were reported today by the Central Statistical Organization of India and are included in Haver's EMERGEPR database.

Among the quarterly data, several sectors contributed to the substantial Q1 increase. Significant accelerations occurred in manufacturing and in finance and business services. Construction and wholesale and retail trade were already strong and they became stronger still. Note that in our table, we have quoted the quarterly changes at annual rates so all the growth rates are on the same numerical basis.

Expenditure data in India are available only on an annual basis. We see that private consumption grew 6.2% in fiscal 2006, a bit slower than 6.7% the year before. Capital formation is far more vigorous, with 14.6% expansion in the latest year. The strength in the construction sector in Q1 suggests considerable forward momentum in this spending category at the turn of the fiscal year. Net exports, interestingly, diminished slightly, from INR 437.6 billion to INR 348.5 billion; both exports and imports grew faster in FY2006, though, than they had in FY2005. Apparently, as the Indian economy is becoming more developed, it is importing more; some of this may be materials for reprocessing and export as well as for domestic use.

Indian Fiscal Year (begins Apr)
India, Bil.Rupees Q1 2007* Q4 2006* Q1 2006(Yr/Yr)
2006 2005 2004
Real GDP** 7390.5 7128.0 6774.3 28481.6 26045.3 23896.6
  % Change 15.6 4.6 9.1 9.4 9.0 7.5
Manufacturing 15.6 7.4 12.5 12.3 9.1 8.7
Construction  21.4 17.0 11.2 10.7 14.2 14.1
Trade/Travel 20.6 18.8 12.4 13.0 10.4 10.9
Finance/Business Services 22.6 8.1 9.3 10.6 10.9 8.7
             
Private Consumption   --   --   -- 17787.0 16750.3 15691.3
-- -- -- 6.2 6.7 5.4
Gross Fixed Capital Formation   --   --   -- 8686.2 7578.1 6573.2
-- -- -- 14.6 15.3 11.8
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