India to mark GDP growth of 7.7 per cent in January-March, highest in two years

India’s GDP is expected to grow from 7.2 per cent in the preceding quarter to 7.7 per cent in January-March, despite moderation in factory output growth in the month of March, says a Nomura report. 

Industrial production growth averaged 6.2 per cent in the January-March period, up from 5.9 per cent in Quarter 4 (October-December), despite moderation in March, as per a Japanese financial services major. 

The hike in average industrial production growth, implies that the overall activity has growth in Q1 (January-March).

"Supporting our view of a pick-up in GDP growth to 7.7 per cent year-on-year in Q1 from 7.2 per cent in Q4", the report said.

The report added that India is expected to witness recovery led by both consumption and investment. However, rise in oil prices as well as tighter financial conditions are expected to pull down the growth rates.

"While we remain optimistic on the near-term growth outlook, we expect the adverse impacts of rising oil prices and tighter financial conditions to slow growth further out," Nomura said.

Industrial output growth fell to a five-month low of 4.4 per cent in March due to decline in capital goods production and deacceleration in mining activity and power generation.