Some cheer for the economy as manufacturing activity hits the highest level in five years and commercial vehicle sales, which is a proxy for growth, surged by 60 to 80 percent in December. In an interview with CNBC-TV18, Soumya Kanti Ghosh, Group Chief Economic Advisor at State Bank of India (SBI) shared his readings and outlook on the same.
Core sector numbers were good enough and cement and steel sectors have done quite well, he said.
Bank’s credit expansion has taken place in cement and steel and on the flipside, coal output has declined and that can impact mining sector, he added.
According to him one needs to be cautious on growth figures as there is some amount of base effect involved.
Construction activity is picking up but the numbers are still in the negative territory. Although the pace is picking up, it will take a couple of months for the construction activity to get into the full swing, said Ghosh.
Speaking on recovery, he said that there is some amount of recovery which is underway currently.
Commercial vehicle (CV) data has been encouraging but will watch for the next few months before taking a firm conclusion, he further mentioned.
We are still maintaining our FY18 gross domestic product (GDP) growth forecast of 6.5 percent in the current fiscal, he said.
On his Budget expectations, he said that the Budget is likely to have a strong rural focus apart from infrastructure sector.
For full interview, watch accompanying video...
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