ETMarkets Smart Talk: India’s economy to grow between 6.5% and 7% over next five years, says UBS Economist Tanvee Gupta Jain
Tanvee Gupta Jain, UBS Chief India Economist.
In an interview with ETMarkets, Tanvee said: “The potential growth I estimate is somewhere between 6.5% to 7%. What we’re seeing is that India’s potential growth is benefiting from digitalization adoption, increased services exports, and now a manufacturing push” Edited excerpts:
What is your take on the recent GDP data? Has GDP slowed to a quarterly low of 6.7% in April to June quarter of the fiscal, compared to the 8.2% seen in the previous year?
I would say the growth in the June quarter was below our expectations. We were actually anticipating 7%. In fact, the growth momentum was expected to normalize this quarter, partly due to the heatwave conditions in April and May, as well as sluggish government spending.
We looked at the capital expenditure by both the central and state governments, which was partly affected by the parliamentary election. However, on a seasonally adjusted sequential basis, the momentum was still positive.
Economic activity, measured by real GDP growth, was up 1.1% quarter-on-quarter.
On a growth value-added basis, which I think is a more interesting story, growth actually accelerated by 50 basis points to 6.8% in the June quarter. Looking at our full-year numbers for FY25, we have marginally lowered our forecast to 6.8% from the earlier estimate of 7%, partly due to two factors.
First, we adjusted for this lower-than-expected economic growth in the June quarter, which was below our estimate of 7%. Second, we incorporated external
