India’s GDP release of last friday showed the December 2013 quarter growing at just 4.7% higher than December 2012. This is lower than the Q2 growth of 4.8%, and higher than the Q1 growth of 4.4%.

Nominal growth continues to be high at 12.7%, which is due to very high inflation. (Real growth = Nominal growth adjusted down for inflation).

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Looking at sectors India’s growth seems to have been driven, largely by Financial services:image

Real growth even in agriculture has been low, inspite of a good monsoon (though the benefits of that will only be visible in Q4).

Finally, the growth by component seems to be driven largely by the rise in exports (due to the depreciating rupee) and a drop in imports for the same reason.

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GDP = Govt Expenditure+Pvt consumption+Investments+Inventory changes + (Exports -Imports)

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The problem is the abysmal growth in pvt consumption (at +2.5%) is horrible. We have seen, though, a relatively big growth in Govt expenditure at +4%.

View: This is not good news. It might actually show our stagflation in serious colour. However, this is an age where markets don’t seem to care, so take any alarm with that in mind!

Note: We’ll have more here and in Capital Mind Premium on these numbers.

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