Recovery could push growth to 6.8%: StanChart

A favorable base effect should lead to strong industrial recovery in India,pushing the country's FY 10 GDP growth to 6.8 per cent,a research report said.

A favorable base effect should lead to strong industrial recovery in India,pushing the country’s FY 10 GDP growth to 6.8 per cent,a research report said.

Standard Chartered Bank,in its report,revised India’s FY 10 GDP forecast to 6.8 per cent from the earlier 6.4 per cent,considering the H1 FY 10 average GDP growth at 7 per cent.

The strong industrial recovery in H2 FY 10 on the back of a low base effect is likely to support GDP growth,the report said.

Story continues below this ad

“With H1 FY 10 average GDP growth at 7 per cent,we now revise India’s FY 10 GDP forecast to 6.8 per cent from 6.4 per cent. The strong industrial recovery in H2 FY 10 on the back of a low base effect is likely to support GDP growth.

There are also some other factors which need to be considered while assessing growth prospects in H2 FY 10,” the report said.

However,it warned that Q3 GDP might disappoint as the agricultural sector dips.

‘One of the worst droughts in India has to be factored in. Given that a drop in Kharif production expected at 18 per cent should be reflected in the Q3 agricultural performance,a drop in the overall GDP growth figure versus this quarter would not be surprising,” the report said.