BWI: Zyfin Launches India’s First Monthly GDP Growth Indicator (MGGI)

Press release from Business Wire India
Source: ZyFin
Thursday, August 29, 2013 10:00 AM IST (04:30 AM GMT)
Editors: General; Business: Banking & financial services, Business services, Financial Analyst, Retailers; Technology
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Zyfin Launches India's First Monthly GDP Growth Indicator (MGGI)
Estimates Q1 FY'14 (or Q2CY'14) GDP growth at 4.3%, well below consensus estimates of 5% signaling Indian economy in deep crisis

Mumbai, Maharashtra, India, Thursday, August 29, 2013 -- (Business Wire India) -- ZyFin, formerly known as BluFin, which has introduced monthly macroeconomic lead indicators that track consumer outlook and the business cycle in India, has today announced the launch of Monthly GDP Growth Indicator (GGI) - India's first and only lead indicator to estimate India's GDP numbers on a sequential month on month basis with seasonal adjustments.

The GDP Growth Indicator, which has been launched coincident with the release of the official quarterly GDP growth data, has estimated year-on year (YoY) growth at 4.3% for the quarter ended June 2013, which is well below the broad consensus estimates of 5%.

ZyFin's estimates suggest that YoY growth in the first two quarters of this calendar year would be the seventh worst on record since the introduction of GDP quarterly data in 1996 and the lowest since 2002.

The silver lining however is on the inflation front. ZyFin's GDP Growth Indicator, which tracks inflation on the basis of the GDP deflator, has witnessed a collapse in the sequential GDP deflator inflation from 6.7% in Q4 FY'13 (or Q1 CY'13) to a Seasonally Adjusted Annual Rate (SAAR) of 1.7% in Q1 FY'14 (or Q2 CY'13) with the monthly estimate for June at 0%. ZyFin estimates that inflation for the year would fall below 6% for the first time since the year 2007, excluding the crisis quarters of 2009.

Commenting on the launch of the indicator, Dr. Surjit S Bhalla, Senior Advisor, ZyFin said "ZyFin has developed a more advanced and immediate model for looking at the GDP by launching this monthly indicator and has thus enabled India to take a giant step away from its present state of data darkness."

Comparing the GDP Growth Indicator data with the official GDP estimates, Dr. Bhalla mentioned "The official quarterly year-on-year real and nominal estimates of GDP are helpful in deriving estimates for the implicit GDP deflator alone, but these figures don't meet the purpose of informing investors about the economy's present status. This is because three fourths of the figures have already been reported and contained in a year-on-year estimate." "Data reporting in developed economies such as the US is done only in sequential terms they are first adjusted for seasonality. This makes comparisons more realistic and computation of sequential annualized growth rates possible", he added.

There are four components of our GDP growth estimate. They are (with approximate weights in parentheses): Agriculture (19%), Manufacturing (15%), Construction (7%) and Services (59%). All sectors have contributed to this sequential low growth of 4.2% , with manufacturing being the biggest culprit. This sector registered negative growth of -0.6% SAAR in the second quarter. Construction was also a drag on growth, registering a SAAR of around 2.6 percent, less than half its long run average of 7 percent. Service sector growth slowed down as well to 6.3% SAAR, well below its long run and expected average of 9% SAAR.

Giving his insights into the Q1 estimates, Debopam Chaudhuri, VP Research, ZyFin observed, "The decline in manufacturing sector in June quarter was expected given the slowdown in intermediate sector observed since April 2013, with production of raw metals like copper, aluminum and pig iron shrinking compared to the previous year." Highlighting the negative trend, he went on to add "If one were to take the IIP data and the conventional annual year-on-year growth, one obtains a negative growth rate of -1.5 % SAAR for Q1 FY' 14 (or Q2 CY'13); the third most negative on record for the manufacturing sector. The latest numbers of ZyFin's Business Cycle Indicator have signaled caution, and the sequential GDP estimate for Q1 FY14 confirms the occurrence of a sharp deceleration from the near 8 % level witnessed in Q4 FY13."

The ZyFin GDP Growth indicator (GGI) would be released on the first working day post the 20th of every month and is aimed to aid in policy making and timely investment decision making.

About ZyFin

ZyFin is a market-defining Financial Information and Content company, providing timely and relevant information to retail and institutional investors on the Indian economy and financial markets. ZyFin is backed by Zodius Advisors (www.zodius.com) and Anthemis Group (www.anthemis.com). For more information, please visit zyfin.com.

About Zodius Advisors

Zodius Advisors builds businesses in the "new" Digital India. Operational since 2011, Zodius typically develops one company every six months and works intensively with its portfolio company teams to "speed up" and "shape up" for exceptional growth and profitability.

About Anthemis Group

Anthemis Group is a specialist holding company providing vision, strategy, leadership and capital to growth-stage companies with innovative business models at the intersection of financial services, markets and technology.


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KEYWORDS
GENERAL, BANKING, BUSINESS SERVICES, Financial Analyst, RETAIL, TECHNOLOGY

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