New Delhi, Oct 1 (IANS): India’s economy remains on a strong footing, supported by robust manufacturing activity, exports, investment and credit growth, a report said on Thursday.
A report by HSBC Global Investment Research pointed to a string of strong economic indicators, including 8 per cent industrial production growth in August, 21 per cent growth in non-oil exports, around 25 per cent growth in public capital expenditure during April-August and 19 per cent credit growth in September.
Around 70 per cent of the indicators in its database showed positive growth in August, up from 52 per cent in the March-July period.
In addition, manufacturing has been particularly strong with September’s flash PMI indicating a sharp rise in new orders.
Based on current trends, the report has estimated India’s GDP growth at around 7.5 per cent in the third quarter.
The resilience has been broad-based despite disruptions from higher energy prices and adverse weather conditions, it said and added that consumption has remained stable helped by fuel tax cuts and a gradual pass-through of higher input costs.
Moreover, investment activity has been supported by public infrastructure spending as well as private sector investments in data centres, semiconductors and renewable energy.
Non-oil exports, especially electronics and engineering goods, have emerged as a key growth driver, the report said, highlighting that goods exports grew 20 per cent year-on-year in volume terms and 26 per cent in value terms in August.
It projects growth to moderate somewhat as the benefits of accommodative monetary policy and GST reductions fade. However, HSBC warned that rising inflation, weather-related disruptions and higher borrowing costs could weigh on lower-income households and the informal sector.
It remains broadly optimistic, citing strong export momentum and the potential benefits of trade agreements with the UK and EU, noting that exports to the UK rose sharply after the implementation of the bilateral trade agreement.
“Overall, we are not too worried on growth,” the report said.
