A Q2 GDP growth in Services of 9.3% led by Transportation and Hotels  (Travel) growth of 10% (Q1: 13.5%) and Financial Services of nearly 190% as well anchored expectations of growth in the future on Services itself. While industrial production was 3.2% in line with IIP esimates, aonstruction was stable at 4.3% and Capital goods thugh lower still grew, manufacturing was a low 2.7% growth (Q1: 2.9%) and agriculture was not that fasr from the 3% mark either.

Interest rate environment is hardly going to get a reprieve in the stretched liquidity conditions as only money investments seem to be trending to output. The social services growth of 6.6% is also good and as spending in a challenged fisc environment barely going o budgeted lines, this is good for the welfare economy

Unfortunate noises on GST, DTC and now retail and aviation FDI indicate more challenges even as FDI for the first half has climbed to a comfortable $20 bln with state deficits unlikely to be met by service tax collections alone and government spending programs will now have a coordinated effort on increasing yields in the fixed income markets 

Q4 growth will be more of the "shock and awe" variety with dull business in Q3 and Q$ a mater of fact. Top line sales in the US in Q4 (December) is a tough 3%and a similar crunch will travel American to India as well, unhindered by hitherto 20% topline growth beyond what could happen till here

 

 

 

Posted via email from The India Investment Post