- Wealth PMS (50L+)
GDP for Q2 2013 ending September, is at 4.8% in real terms. This is marginally better than the Jun 2013 quarter, when real growth hit 4.4%.
But that hides the real deal: That inflation is now carrying the economy on. Look at the nominal growth rate suddenly jump from last quarter’s 8% to 13%!
The gap between the two rates is inflation – it takes away from your growth, effectively. With 13% nominal growth and 4.8% real growth, the “inflation deflator” is 8.2%.
What might be happening here is that inflation impacts have probably helped GDP growth a little (it’s difficult to figure out what part of growth is inflation) – so it’s entirely likely that part of this 4.8% is inflation that “looks” like growth.
Looking at sector growth tells you another story:
This is real growth – after inflation’s backed out. Points to note:
Finally, here’s a look at Components:
What you can see is:
Overall, the GDP number which looks marginally better than earlier hides two important points:
Both are temporary.
Markets will react on Monday as the news was at 5:30 pm, after market hours.
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