India: 4Q 2018 growth expected to arrive at 6.3% - Rabobank

Hugo Erken, senior economist at Rabobank, suggests that their combined nowcast model shows that India’s economic growth for the fourth quarter of 2018 is expected to arrive at 6.3%, which would imply a significant slowdown of economic activity after the already disappointing GDP print of 7.1% for the third quarter.

Key Quotes

“We have to stress though that the bandwidth of our nowcast is far from narrow. Our upper bound is 6.9% and the lower bound is 6.0%. So there is still a large degree of uncertainty surrounding predictions of Indian economic growth.”

“All in all, we are pretty confident that India’s next GDP print will put the Indian economy on a downward-sloping growth trajectory. Nevertheless we also expect growth to rebound in 2019Q1 and Q2 on the back of favourable fiscal and monetary policies.”

“The expected slowdown is not surprising given the disappointing global economic data, which also has repercussions for India’s external sector. On the internal front, we see increasing weakness in private consumption and industrial production, whereas the services sector seems to be holding up quite well. Ultimately, we revise downward our expected GDP growth rate for fiscal 2018/19 from 7.4% to 7.1%.”