India's July-Sep GDP Growth at 7-8%

India's GDP growth rate for the July-September quarter will likely remain between 7-8 percent and 9.8 percent.

India's GDP grew by 20.1 percent in the first quarter of fiscal year 2021-22 compared to the previous fiscal.

According to Motilal Oswal Financial Services Limited's EcoScope report, there will be some moderation of Economic Activity Index-Gross Valu Added (EAIGA) growth in July 2021 largely due to weaker fiscal spending.

However, it noted that private consumption -- both investments and consumption -- has been growing steadily.

It stated that although there is not a one-to-one correlation of our EAIs with the official GDP/GVA because of the underlying differences our composite indices move in line with the official real GDP (exempted from discrepancies and real GVA estimates).

"Accordingly we expect real GVA growth to be 7-8% YoY in 2QFY22, compared with 20.1 percent YoY growth for 1QFY22." According to Motilal Olswal's estimates total consumption grew by 5.1% YoY in July 2021, compared to 2.7% in June 2021, and '-12.1’ per cent in July 2020.

Private consumption rose at 6.9% YoY for three months, while government consumption declined by 31% YoY in July 2021.

EAI-GVA, which excludes government consumption, grew faster at 7.1% YoY in July 2021. This was faster than the 3.2% YoY in June 2021. However, it was slower between March and May 2021.

In July 2021, the EAI-GDP saw a negative contribution from external trade due to a faster growth of imports than exports.

The total investments increased at a five-month low of 12.1 percent YoY in July 2021, compared to 18.5% in June 2021, and a 21 percent decline in July 2020.