Care Ratings sees Q1 GDP growth at 6.5%

Mumbai: Domestic agency Care Ratings expects an acceleration in the June quarter GDP growth to 6.5 percent over the last year, up from the 6.1 percent in the preceding quarter.

"We expect first quarter GDP growth at 6.5 percent at 2011-12 constant prices. This growth is contingent on realisation of gross value added (GVA) growth of 6.3 percent," it said in a note today.

The city-based agency joins a host of other analysts who are estimating for a similar surge in growth, after GDP expansion went down to 6.1 percent for the March quarter of last fiscal year due to the note ban.

The government will be releasing its official figures on GDP growth on Wednesday.

Agriculture is expected to grow at 3.5-4 percent during the reporting quarter, largely due to residual output of the Rabi or the winter crop harvest, it said.

The value addition in manufacturing will come between 4.5 and 5 percent, it said, adding the index of industrial production is at a positive 1.25 percent for the same period.

Electricity growth will be 7 percent, while mining will be up to 3 percent, it said, adding the fastest growing segment will be public administration and defence which is expected to grow 12 percent majorly due to front-loading of spending by the government wherein 80 per cent of the budgeted fiscal space has already been exhausted.

Construction segment is projected to grow at 6 percent on a GVA basis following the push by government in terms of increased spending on infrastructure, it said.

Growth of trade, hotels and transport will be around 7 percent with prospective GST impacting services to a limited extent, it said.

The real estate sector is "sluggish" due to the introduction of a regulatory machinery, it said, estimating the segment to report a growth of 6.5 percent during the quarter.