RBI Given Ammunition To Hold Rates As Indian Economy Recovers

Posted December 03, 2017

"The latest growth outturn is in line with RBI's recent rhetoric and thus shouldn't move the needle on interest rates". "The numbers indicated that the impact of demonetisaton and GST (Goods and Services Tax) are behind us", he added.

Syncing with recent Moody's upgrade of India's sovereign credit for the first time in almost 14 years, the growth buoyancy comes at a time when the Modi Government has been facing Opposition charges of wrong implementation of demonetisation and GST that disrupted the $2.4-trillion economy.

While investment grew by 4.6 per cent in Q2 compared to 1.6 per cent in the first quarter on a year-on-year basis, its share in GDP fell to 27.5 per cent from 29.9 per cent in Q1, indicating that GST-related stress in the economy had not dissipated.

Government spending slowed in the quarter, growing 4.1 per cent, as against 17.1 per cent in the June quarter.

The US deliberately provoke North Korea for a new adventure - Lavrov
Tensions on the Korean peninsula escalated Wednesday after the North launched its new intercontinental ballistic missile . Trump has praised China - a close ally of Pyongyang - for its efforts to put pressure on North Korea.

"It is likely that when revised estimates are prepared, indirect tax collections for this period may actually be higher than what we have reported", Anant said at a press conference while admitting that the GST introduced a "certain level of statistical challenge" in compiling the growth numbers. "After the five quarters of growth decline, we see reversal of GDP in the second quarter", he said.

While manufacturing grew rapidly at 7% in the September quarter from merely 1.7% in the first quarter (April-June), the growth in electricity and other utilities was recorded at 7.6% and it was nearly 10% in trade, hotel, transportation and communication.

Underlining the strong fundamentals of the economy, Finance Minister Arun Jaitley on Thursday said India has standardised itself for a growth rate of seven per cent to eight per cent.

The GDP for the July-September quarter showed a growth rate of 6.3 per cent after the previous quarter recorded a three-year low of 5.7 per cent.

Microsoft announces major expansion at Redmond campus
The campus remodel will be built for pedestrians and bikes with all cars in an underground parking facility. Microsoft's Redmond campus, which opened in 1986, now totals 15 million square feet in 125 buildings.

Modi government hopes the ratings upgrade can attract more foreign investors, who pumped United States dollars 15 billion into Indian equities in July-September, up 44 percent from the previous quarter.

While the rebound in GDP growth in the second quarter can act as a "confidence booster" for the economy, the slowdown in the services sector, including finance, transport and hotels, as well as in agriculture is cause for concern, according to industry bodies and consultants.

"Indias economic stress continues; GDP far below at 6.3 pc compared to 7.5 pc of Q2 of past year! - a close scrutiny reveals the real picture of the economic mess created by BJP Government", he said in a statement. The growth in public administration, defence and other services also stood at 6 per cent.

'Red warning' to airlines over Bali volcano
This is the highest aviation warning when a volcanic eruption is underway with a significant amount of ash in the atmosphere. Worldwide airlines including Jetstar and Qantas cancelled flights to and from Bali in the wake of the eruption.