India's Economic Recovery Probably Slowed in the Second-Quarter
India's economic recovery probably slowed in the second-quarter.Reuters

India is expected to put out weak quarterly GDP growth data on 28 November, with growth hit by slowing industrial activity and delayed monsoon rains that hurt farm output.

Analysts expect growth in Asia's third-largest economy to have decelerated to between 5% and 5.3% in the July-September second-quarter, down from 5.7% in the preceding three-month period.

Goldman Sachs forecast India's industrial output growth to have slowed sharply to 1.1% in the July-September quarter, from 4.2% in the previous three months,

Agricultural output growth could have weakened to 1%, from 3.8% in the previous quarter.

But service sector growth, however, is expected to have increased to 7% on an annual basis, from 6.6% in the preceding quarter, according to the US bank, buoyed by relatively strong growth in transport, communication and construction sectors.

Standard Chartered said in a note last week that India's growth could "have slowed" to 5.1% year-on-year from 5.7% % in the first-quarter "as the impact of one-off factors and the favourable base effect faded. Delayed monsoon rains likely lowered agricultural production, while weaker external demand probably pulled down industrial production."

The British bank forecast agricultural growth to have slowed to 1.8% year-on-year from 3.8% and industrial growth to have halved to 2.1% year-on-year from 4.2%"

StanChart said: "Some support is expected from higher domestic trade in sectors such as autos. The continued improvement in construction activity and steady government spending also likely provided support. While a growth slowdown is widely expected, a significant deviation from expectations in either direction could affect sentiment.

Optimism that Prime Minister Narendra Modi's regime can boost growth has reflected in the performance of the S&P BSE Sensex share average.

The benchmark index has rallied some 35% this year, making India the best performing equity market in the Asia-Pacific region.