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Indian Economy Update Q3FY09

Indian Economy Update March 2009.

India’s GDP grew 5.3% during Q3FY09.

• GDP growth estimated by the CSO at 5.3% during Q3FY09 as against 8.9% in Q3FY08 came below street expectations.
• The 'agriculture, forestry & fishing' and 'manufacturing' segments witnessed decline of 2.2% and 0.2%, respectively. However, the economic activities in mining, construction and services provided some vibrancy to Q3FY09 numbers.
• With 9MFY09 GDP growth coming at 6.9%, our 4QFY09 growth would need to come at 7.6% to achieve the 7.1% advance estimate by the CSO for FY09. This is less likely in current uncertain macro-economic environment.
• However, our savings as well as Investments as a percentage of GDP are one of the highest in the world. This is likely to insulate us (albeit partly) from deteriorating world economic environment.