
India's Oct-Dec GDP growth seen stronger on improved rural demand, government spending
government spending gathered pace. Asia's third-largest economy saw a sharp slowdown in the July to September quarter, with GDP growth slipping to 5.4%, the slowest pace in seven quarters. Economists blamed the slowdown on weak urban demand and a delay in government spending due to national elections last year.
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In the three months to December, gross domestic product likely expanded by 6.3% from a year earlier, according to a Reuters' poll. But that would still be lower than the central bank's estimate of 6.8%.
Economic activity, as measured by gross value added (GVA) which is seen as a more stable measure of growth, is estimated to have expanded 6.2% year-on-year in October-December as compared to 5.6% growth in the previous quarter.
«The improvement is led by a revival in rural demand and a rise in central government capital expenditure,» said Gaura Sen Gupta, chief economist at IDFC First Bank Economic Research.
«Urban demand is also showing some signs of improvement, but the recovery remains relatively softer than rural demand,» Sen Gupta said.
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