The Indian GDP numbers for Q2 FY08 are out. It is up 8.9%. This was in line with expectations given the deceleration in manufacturing activity in the rate sensitive sectors. Given that banks have started lowering their lending and deposit rates and that inventory is getting cleared, we expect manufacturing activity to pick up in the coming months and are thus maintaining our full year estimate of 9.3%.
Agriculture growth came in at 3.6% – given the good monsoon we expect trends to remain favorable. Overall industrial growth was 9.1%. (more…)