Barclays maintains India's Q2 growth forecast at 7.8 per cent

Mumbai, September 6: British fincial services major Barclays has maintained its India growth forecast of 7.8 percent for 2015-16 based on expected rise in government spending, saying consumption trends are also expected to remain “generally supportive”.

“Despite a softer-than-expected growth in the latest GDP print, we maintain our FY15-16 GDP growth forecast of 7.8 percent,” Barclays said in a research note. “The strong rise in central government spending should help GDP growth to accelerate in second quarter of fiscal year 2015-16,” it said.

The Indian economy grew 7 percent in the first quarter of this fiscal, showing signs of slowing vis-a-vis the 7.5 percent expansion in the quarter before. But the growth was much higher than 6.7 percent registered in the first quarter of the last fiscal.

The quarter’s GDP figures, unveiled on August 31, are calculated by the Central Statistical Office under a new methodology, unveiled earlier this year, which has been criticised for being quite contradictory when compared with other economic indicators such as the revenue growth of listed firms and bank credit growth.

Reserve Bank of India (RBI) Governor Raghuram Rajan and Chief Economic Adviser Arvind Subramanian have publicly expressed scepticism about growth numbers. (IANS)