EUR 125.00 For Business Accounts Only

MOSL: ECOSCOPE-4QFY19 GDP growth lowest in five years; Base effect and farm sector explains majority of the slowdown

ECOSCOPE: 4QFY19 GDP growth lowest in five years; Base effect and farm sector explains majority of the slowdown

 

• Real GDP/GVA growth decelerated sharply to 20-quarter slowest growth of 5.8%/5.7% YoY in 4QFY19, much lower than the market consensus of 6.3%/6% (our forecast of 6.2%/5.9%). It implies that real GDP/GVA grew 6.8%/6.6% in FY19, lower than market consensus (and our forecast) of 6.9%/6.7% and the government's estimate of 7%/6.8%.
• Although the headline growth appears alarming, the details are a bit puzzling. As against the general expectation of consumption slowdown, investments were the key driver of slower growth in 4QFY19, while total consumption (private + government) grew faster at 8.1% in 4QFY19 v/s 7.9% in 3QFY19. Further, a decline of 0.1% YoY in farm sector output drove lower GVA growth. In fact, slower GVA growth was entirely driven by the manufacturing sector, as services sector growth was at 6-quarter high of 8.4%.