Downturn in industrial activity to pull down GDP in Sept quarter: Report

The country's GDP growth is expected to decelerate to 7.6 per cent in the September quarter, from the 8.2 per cent in the June quarter, driven by slowdown in industrial activity, a report said Wednesday.

Growth will continue to be under pressure for the remainder of the current fiscal as well and the FY19 growth number will come at 7.1 per cent, economists at private sector lender Axis Bank said in the report.

The industrial sector growth on a gross value added basis will come at 6.6 per cent, dragged down by sluggish mining and manufacturing activity, the report said, noting the handsome upsurge in electricity.

Despite a higher factory output, manufacturing growth will slowdown to 7.5 per cent on weaker corporate sector results, it said.

The services sector activity will grow at 8.3 per cent, but will not be able to pull up the overall GDP growth, it said.

Within services, financial services and public administration will grow at a faster clip and will offset the weakness in construction and trade, it said.

However, the report said other services including trade, hotels, transportation and communication are presenting a "mixed picture" at present.

It said that the benefits of base effect are wearing off for the construction sector, pointing out that cement production growth will turn weaker at 12.5 per cent for the second quarter.

The steel production growth will come higher at 4.6 per cent, against 2.3 per cent in the preceding quarter. Official data on growth is expected to be released by the end of the month. A majority of analysts are expecting a slip from the surprisingly high growth figure of 8.2 per cent achieved in the first quarter.

(With inputs from agencies.)