India’s economy grew at its fastest pace in a year in the October-December quarter as consumers, businesses and the government stepped up spending, a Reuters poll predicted
This suggests that disruptions from a shock ban on high-value currency notes in November 2016 and the chaotic launch of a goods and services tax (GST) in July are fading.
Gross domestic product INGDPQ=ECI grew 6.9 percent in the October-December quarter from a year earlier, according to the poll of more than 35 economists, taken over the past week.
If the data, due at 1200 GMT on Feb. 28, matches the consensus, the quarter will have the best growth rate in 2017.
In July-September, the economy grew 6.3 percent annually, a return to a faster growth trajectory after five consecutive quarters of slowdown.
In the latest quarter, “government spending was stronger and private consumption demand was robust as well, as seen in strong growth in auto sales,” said Abhishek Upadhyay, economist at ICICI Securities PD.
“Recent buoyancy in indicators such as cement output also points to recovery in segments such as construction, and real estate that were hit most from demonetization.”
Still, growth in the world’s seventh largest economy is far from the near-double digits pace recorded during the years before the financial crisis.
What has also weighed on the economy is exports, which took a hit last year from an appreciating rupee, which strengthened 6.5 percent against the dollar in 2017.
While down around 1 percent this year, the rupee is not expected to weaken significantly, according to a separate Reuters poll of foreign exchange strategists.