Archive for August 31st, 2007

GDP estimate Q1: 2007-08

August 31, 2007

The newswires and business news channels are buzzing with the fact that our GDP for Q1 2007-08, has grown by a neat 9.3%. The press release and details from CSO is here. Some details:


  • Last year Q1 growth was seen at 9.6%.
  • The surprise part is agriculture which has grown by 3.8% higher than 2.8% seen Q1 last year. Considering the fact that data is for Apr-Jun , which includes only the rabi crop, this growth is welcome.
  • Manufacturing, Construction, Hotel Services and Financial Services have grown at double digit growth rates around 10-12%


  • As I had mentioned earlier, CSO has also started giving GDP data based on expenditure as well. Indian growth story has been consumption driven and economists had raised their concern that it needs to more investment driven.
  • The data based on expenditure helps understanding this aspect. In the earlier data we had  seen this was indeed the case and Consumption (Private Final Consumption Exp.) is about 55-60% of GDP for most of 2005-07. 
  • If one looks at the previous data closely one finds that consumption is usually the highest in Q1 and then goes down over the next quarters.
  • As this is Q1, we can’t say whether the consumption is indeed going down or not. However, in both 2005-06 and 2006-07 the figure was 60% and in Q12007-08 it is 58%.
  • Another +ve is that investment as a % of GDP is higher at 29.6% compared to 27.9% in Q1 2006-07.
  • Impact of rupee appreciation can be seen as exports have gone down and imports have gone up.

Things are still looking pretty good at the moment. As sub-prime meltdown was mostly post June, it will be interesting to see the next quarter figures to see if there is any kind of impact of sub-prime markets. Keep posted for further developments.

Assorted Links

August 31, 2007

1. Another primer from WSJ Blog. This time on Fed rate cut.

2. PSD Blog points to what new World Bank Preseident Bob Zoellick intends to do.

3. Today’s newspapers mention about RBI’s Annual Report. Here it is.

4. TCA in his Friday column, points to a paper from Prof Dilip Nachane.

5. BS has a nice edit on Indian Political Economy scenario.

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