The prediction is based on the leading indicators such as cement production, passenger traffic, sale of both commercial vehicle and passenger vehicles, non-food credit growth and aircraft movement among others. These factors are acting as a major catalyst behind driving GVA in Q1 FY19.
In its report termed “Ecowrap”, SBI said, “The Composite Leading Indicators (CLI) is signalling that the economic activity for Q1 FY19 has picked up substantially and the GVA (Gross Value Added) growth would be 7.6 per cent.”
The headline of GVA would however likely to come down due to weak agriculture growth, it added.
“Finally, how much GDP will be higher than GVA at 7.6 per cent Q1FY19? We believe it could be 7.7 per cent, as a lot of subsidies has been frontloaded in Q1, implying that the gap between GDP and GVA may just vanish in Q1!,” it said.
The final reports on quarterly GDP estimate for April-June 2018 will be released by the Central Statistics Office (CSO) on August 31.
“We believe, by front-loading subsidy amount in Q1 may have some impact on Q1 GDP figure and the gap between GDP and GVA might come down to some extent in Q1 as compared to remaining quarters in FY19,” the report said.