India's growth pace likely slowed in April-June: Reuters Poll
- S&P 500, Nasdaq set records as tech, banks lead
- Texas Instruments (TXN) Tops Q4 EPS by 20c, Issues Solid Q1 Outlook
- Intuitive Surgical (ISRG) Tops Q4 EPS by 10c; $2B Accelerated Share Repurchase
- Seagate Technology (STX) Tops Q2 EPS by 30c
- After-Hours Stock Movers 01/24: (BOBE) (STX) (WDC) Higher; (NEWT) (MRCY) (CA) Lower (more...)
A worker conducts a final check on a dress inside a small-scale garment manufacturing unit in Mumbai, India, August 1, 2016. REUTERS/Danish Siddiqui
Get the Pulse of the Market with StreetInsider.com's Pulse Picks. Get your Free Trial here.
By Krishna Eluri
BENGALURU (Reuters) - India's economic growth likely lost some momentum in the April-June quarter on cutbacks in domestic and global demand, a Reuters poll showed.
The poll also found that economists expect the newly-passed goods and services tax will take time to have an impact on gross domestic product growth.
For April-June, the median forecast of 40 economists was for GDP growth of 7.6 percent from a year ago, slower than the 7.9 percent in the previous quarter.
The slower pace would still be rapid, by any standard. China reported 6.7 percent annual growth for April-June, and the Philippines posted 7.0 percent.
Much of India's slowdown was attributed to slumping demand. On an annual basis, the country's exports fell for 18 consecutive months until June, when they finally rose. Business surveys have pointed to slowing foreign and domestic demand.
The latest reform from the government, the goods and services tax, should transform the country into a common market and is widely expected to add up to two percentage points to the GDP growth pace after implementation.
But the median forecast of 13 economists who answered an extra question on the tax change was that GST will have no major addition to the country's GDP during the fiscal year starting April 2017, when the measure is slated to take effect.
The standard rate for GST of more than 17-18 percent "could be negative for the services economy, which is more than 60 percent of GDP," said Abhishek Upadhyay, economist at ICICI Securities.
"Net impact may be negative initially, even as medium term impact will be undoubtedly positive," he said.
But in the fiscal year 2018-19, GST is expected to increase the GDP growth rate by 0.75 percentage points.
"Near-term costs may exceed the benefits, though investment ramp-up and streamlining benefits will follow," said Vishnu Varathan, economist at Mizuho.
(Polling by Khushboo Mittal and Shaloo Shrivastava; Editing by Richard Borsuk)
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- U.S. asset managers seek delay on new variation margin rule
- Alcoa beats revenue estimates, sees higher aluminum demand
- France's Fillon acts to head off scandal over wife's work
Create E-mail Alert Related CategoriesReuters
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!