In the wake of increase in several macroeconomic indicators like trade, transport and communication, SBI Research in its latest report has accessed that Indian economy is likely to improve to 6 percent in the second quarter of the current fiscal year 2017-18, as against 5.7 percent growth in the first quarter of FY18. It also said that Q2 growth might be in the lower end of 6-6.5 percent band with an upward bias.
As per the report, index of industrial production (IIP) growth for September may be over 5 percent as mining and electricity growth is likely to be significantly better as state electricity boards had purchasing power because of festive demand. It noted that most of the lead indicators -- foreign tourist arrivals, international passenger and air freight traffic, railway traffic and telephone subscribers have shown an uptick in recent months.
SBI Research also said that consumption facing sectors are currently witnessing an increase in investment opportunities which ‘bodes well for the investment cycle going forward’. However, it observed that growth rate in agriculture sector is a point of concern. Agriculture growth may be muted as rainfall in the first three months of monsoon was hugely deficit in key foodgrain producing states like Uttar Pradesh, Punjab, Haryana, and Madhya Pradesh.
