GDP to grow 5.2 pc in first quarter of FY15: Dun & Bradstreet

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After two consecutive years of sub-5 per cent growth, the Indian economy is expected to recover and expand 5.2 per cent in the first quarter of this financial year, Dun & Bradstreet said in a report.

"The fiscal year 2014-15 is expected to start with an optimistic GDP growth of 5.2 per cent in Q1 FY15 as some of the current macroeconomic numbers strengthen hope that the recovery for the Indian economy is under way," Dun & Bradstreet India Senior Economist Arun Singh said.

India's economy grew 4.7 per cent in 2013-14, following an expansion of 4.5 per cent in 2012-13. In the fourth quarter of 2013-14, growth remained subdued at 4.6 per cent, mainly due to a decline in manufacturing and mining output.

"Two consecutive years of significant slowdown along with a host of domestic unresolved issues has placed a burden on the new government. The upcoming Union Budget would broadly reveal how the new government plans to steer the economy out of the current slowdown," Singh said.

He added that "currently, India needs a robust fiscal policy to build the framework for a sustainable growth. We assume reassessing the quality of expenditure should be a priority along with rebalancing the composition of expenditure with the focus shifting more towards capital expenditure."

According to Dun & Bradstreet, optimism is likely to be boosted with the upcoming industrial production data.

The Index of Industrial Production (IIP) is expected to have grown 3-4 per cent during May 2014, it said. In April, the index increased 3.4 per cent.

On prices, the report said both retail and wholesale inflation are likely to edge up as global crude oil prices have shot up due to civil unrest in Iraq.

Inflationary pressures remain high, given the prospect of a sub-normal monsoon this year.

D&B expects headline wholesale inflation to remain elevated at 6-6.2 per cent in June 2014. Wholesale prices increased 6.01 per cent in May.

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