SECOND QUARTER GDP AT 7.9%

India’s economy grew at its fastest rate in 18 months in the quarter through September, smashing expectations and adding pressure to bring forward an interest rate rise and cut stimulus spending as inflation mounts.

Asia’s third-largest economy grew 7.9% in the past quarter from a year earlier, far above forecasts of 6.3%, but growth was expected to slow this quarter when the impact of a weak monsoon would be seen on crops.

The expansion was driven by government spending, manufacturing, services, and a better-than-forecast farming output, sending bond yields and swap rates higher as investors bet on a rise in rates and the finance minister said growth could hit 7% in the fiscal year ending in March 2010.

“This data could be a green light for the Reserve Bank of India to hike rates, and there are greater chances of this by end of the calendar year,” said Robert Prior-Wandesforde, senior Asia economist at HSBC in Singapore.

“The exit from the fiscal stimulus by the government may also be earlier post the GDP data.”
Prior to the data, most economists had predicted a rate rise sometime between January and April 2010.

In the June quarter, India’s economy grew 6.1% from a year earlier, and Prior-Wandesforde said that by his calculation the last quarter’s growth was the sharpest on a quarter-by-quarter basis since quarterly data began in 1996.

Manufacturing output grew 9.2% in the quarter as consumers bought more cars and other goods.

Larger neighbour China, which along with India is helping to pull the global economy out of its worst recession in decades, clocked growth of 8.9% during the same quarter.

MINT

INDIA INC’S PAT TO GROW AT 23% THIS FISCAL

India Inc is likely to witness a 22.8% growth in its profit after tax (PAT) in the current fiscal, an economic think-tank has said in its report. “Corporate sales growth will average at a meagre 4.1% in 2009-10. At the same time, the PAT will rise by a robust 22.8%,” the Centre for Monitoring Indian Economy (CMIE) said in its latest report.

The manufacturing sector (excluding petroleum sector) would report a 24.3% growth in PAT mainly because of low prices of raw material and soft interest rates, CMIE said, adding that the PAT of the financial and non-financial services would rise by 32.2% and 20.4%, respectively.

The Financial Express

PM ECONOMIC PANEL SEES 2009-10 GDP GROWTH AT 6.5%

India’s accommodative monetary policy may continue until the end of March, with the need for tightening once inflation picks up, a government panel that advises the prime minister said on Wednesday. Former central bank governor C. Rangarajan, who heads the panel, said growth in the fiscal year that ends in March 2011 would accelerate to 7 to 8% after growing by about 6.5% in 2009/10, with inflation at around 6 percent by the end of March 2010.

MINT/Reuters

PRIORITY STATUS TO BOOST HOUSING DEMAND

To facilitate credit flow into the cash-strapped real estate sector, the Reserve Bank of India (RBI) on Saturday announced several measures, including a refinance facility for the National Housing Bank and priority sector status for housing loans up to Rs 20 lakh.

RBI said the loans granted by banks could classify housing loans up to Rs 20 lakh given to house finance companies (HFC) as “priority sector” advances, subject to a ceiling of five per cent of their total priority sector target.

The Hindu Business Line

FDI IN REAL ESTATE MAY TOUCH $25 BN IN 10 YEARS

Foreign direct investment in the country's real estate sector is likely to rise to a whopping $25 billion in the next 10 years from the present $4 billion, even as the industry faces a slowdown in the short term due to rising interest rates...

The Economic Times

China property boom falters, but crash unlikely

High prices, rising interest rates and a government drive to cool speculation are dampening the market. Many Chinese bought property several years ago partly because of talk that preparations for the 2008 Beijing Olympics would boost prices in the capital and other cities — so now that the Olympics are near, some fear a crash may be looming

The Economic Times
http://economictimes.indiatimes.com/International_Business/
China_property_boom_falters/articleshow/2638934.cms