Weak GDP growth due to slowdown in construction, transport: Nomura

Fin Min Thursday announced the economy will grow at 5% in current fiscal

Weak growth in sectors such as construction, transport and financial services has led to a slowdown in economy and lowering of GDP growth target, according to Nomura Research. Nomura said it sticks to its 25 basis points rate cut estimate in May based on the released data.

The finance ministry yesterday announced that the economy will grow at 5% in current fiscal lower than earlier projected 5.7%growth estimate.

According to advance estimates, India's FY13 GDP growth fell sharply to 5% on a year on year basis  from 6.2% in FY12, below expectations. largely due to low growth across sectors including agriculture, industry and services. "While weaker industrial growth was expected, the sharper-than-expected slowdown is mainly due to sectors such as construction, trade/transport and financial services recording weaker growth.  Broadly,  data confirm the ongoing growth slowdown and suggest that weak industrial demand has also hit services demand. It also suggests that Q3 and Q4 FY12 GDP growth will be weak, with Q3 (Oct-Dec; out end-Feb) possibly under 5%.,'' Nomura said.