Ahead of the Central Statistics Office's (CSO's) Gross Domestic Product (GDP) estimate for the fourth quarter of fiscal 2017-18, domestic rating agency, Indian Credit Rating Agency (ICRA) in its latest report has forecasted that India's GDP growth is expected to improve to 7.4% in January-March quarter of 2017-18 (Q4FY18) from 7.2% in Q3FY18. It added that the growth will be supported by good rabi crop harvest and improved corporate earnings. It also said that this will exceed the implicit forecast of 7.1% embedded in the CSO's Second Advance Estimate of National Income for FY18.
As per the report, the growth of the Indian gross value added (GVA) at basic prices in year-on-year (Y-o-Y) terms is likely to record a considerable recovery to 7.3% in the fourth quarter of FY18 from 6.7% in the third quarter of FY18, thereby rebounding above 7% after a gap of five quarters. The report stated that this revival in Q4, relative to the previous three months, is expected to be broad-based, supported by an uptick in industry (to 7.7% from +6.8%), agriculture, forestry and fishing (to 4.5% from 4.1%), and services (to 7.8% from +7.7%).
ICRA said that the uptick in economic activity that set in during the second half of 2017 is expected to have strengthened in Q4 FY18, led by a healthy rabi harvest, robust volume growth in various sectors, an improvement in corporate earnings and a favourable base effect. It further said it expects a mild pickup in growth in the services sector, reflecting the improvement in diesel and petrol consumption, service sector exports, passengers carried by domestic airlines, cargo handled at major ports and railway revenue carrying freight.