Consumption in India
India - Consumption
GDP growth accelerates again in Q4 FY 2017, beating expectations
In the fourth quarter of FY 2017—which ran from January to March 2018—the Indian economy continued to strongly emerge from the downturn that followed the abrupt demonetization of November 2016 and the road bumps caused by the introduction of the Goods and Services Tax in July 2017. GDP grew a better-than-expected 7.7% in year-on-year terms in Q4 FY 2017, the highest reading in nearly two years and above the revised 7.0% increase recorded in Q3 FY 2017 (previously reported: +7.2% year-on-year). The figure was above the 7.3% expansion that market analysts had expected.
Domestic dynamics underlined economic growth in Q4 FY 2017. Private consumption growth accelerated to 6.7% year-on-year in Q4 from 5.9% in the October-to-December period. Moreover, with the government loosening its purse strings, its consumption increased by a significant 16.8% in Q4 from 6.8% in Q3. Meanwhile, a 14.4% increase in fixed investment further drove growth in Q4. This also represented an acceleration from Q3’s 9.1% expansion and was the highest reading in seven quarters.
The external sector, however, weighed on overall growth. Exports of goods and services expanded a measly 3.6% in Q4 FY 2017, representing a deceleration from the 6.2% expansion in the October-to-December period. Imports, meanwhile, remained buoyant and recorded growth of 11.9% in Q4. This represented an acceleration from Q3’s 11.5% expansion and the fastest growth in three quarters. As a result, the external sector detracted 1.2 percentage points from economic growth in Q4, more than the 0.9 percentage-point deduction in Q3.
All in all, the Indian economy expanded 6.7% in FY 2017, a slowdown from 7.1% in FY 2016. This fiscal year, activity should pick up somewhat due to stronger private consumption growth. Moreover, an earlier monsoon than normal could boost agricultural output. However, there will be choppy economic waters to navigate, posing risks to the outlook. The Reserve Bank of India is likely to react to a stronger economy and accelerating inflation with tighter monetary policy over the course of this fiscal year, which could take some steam out of the economy’s sails. Moreover, high oil prices will stoke imports because India sources most of its oil from abroad, putting pressure on the current account balance this fiscal year and subtracting from growth.
India GDP Forecast
Met the why particular Consensus Forecast panelists see the economy picking up in FY 2018 and growing 7.3%, which is unchanged from last month’s forecast. In FY 2019, our panel expects GDP to expand 7.4%.
India - Consumption Data
|Consumption (annual variation in %)||7.3||6.4||7.4||7.3||-|
5 years of economic forecasts for more than 30 economic indicators.
India Consumption Chart
Source: Ministry of Statistics and Programme Implementation and Met the why particular calculations.
|Bond Yield||7.95||-0.04 %||Jun 14|
|Exchange Rate||67.69||-0.09 %||Jun 14|
|Stock Market||35,600||-0.08 %||Jun 14|
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June 15, 2018
In May, merchandise exports expanded 20.2% compared to the same month last year, up from the 5.2% expansion recorded in April and totaling USD 28.9 billion.
June 14, 2018
In May, consumer prices rose 0.51% from the previous month—more than the 0.44% rise recorded in April and representing the largest increase in six months.
June 12, 2018
Annual industrial production growth accelerated to 4.9% in April from a revised 4.3% in March (previously reported: +4.4% year-on-year).
June 6, 2018
The Reserve Bank of India (RBI) acted at its monetary policy meeting on 4–6 June, with central bankers unanimously agreeing to raise interest rates by 0.25 percentage points.
June 5, 2018
The composite Purchasing Manager’s Index (PMI), produced by Nikkei and IHS Market, fell to 50.4 in May from 51.9 in April.