Indian economy likely to have expanded 7% in December quarter: Report

The country’s real GDP growth for the December quarter is all set to come at a higher-than-anticipated 7%, a German brokerage said on Monday.

"We are forecasting October-December 2023 real GDP to have grown 7.0% year-on-year during the quarter, which is higher than what we had previously anticipated,” analysts at Deutsche Bank said in a note.

The official data on quarterly growth will be released on February 29. In the three months ended September 2023, the economy had clocked a 7.6% growth.

The German brokerage said its estimate is based on a proprietary index of five high-frequency indicators, including industrial production, exports, non-oil-non-gold imports, bank credit and consumer goods.

It said that another indicator comprising nearly 65 high-frequency indicators is also pointing towards 7% growth for the December quarter. ”The Indian economy has exhibited remarkable resilience despite the Russia-Ukraine war of last year and Covid before that, with growth momentum holding up far better than anticipated,” the report said.

Corporate sector data suggests that the gross profit momentum has remained buoyant which has led to the expectation of the industrial sector real gross value added growth to come at about 7-8% in the October-December period, it added. The brokerage said it will review the FY24 growth estimate of 6.8% after the release of the official data on February 29.

On a long-term basis, India is likely to deliver a minimum 6-6.5% real GDP growth which is significantly higher than comparable emerging markets over the next two decades, the brokerage said.

It attributed the same to the reforms agenda aimed at formalisation, digitisation, privatisation, urbanisation, financial sector liberalisation and boosting India’s infrastructure and manufacturing base.