Did economy recover from slump? Q2 GDP data to be out today will give answer

Has the Indian economy finally recovered from the slowdown? We don't have to wait longer to know the answer.

The Central Statistics Office (CSO) will release gross domestic product (GDP) growth estimates for the September ended quarter later on Thursday.

In the last quarter, the GDP growth slumped to 5.7 percent, lowest in three years. The slowdown was resulted by the manufacturing sector, which expanded at much slower pace -- at 1.2 percent when compared to the 10.7 percent growth last year.

Many experts believe the slowdown in the economy is because of the disruption in business activity following note ban in November last year and destocking by companies before the Goods and Services Tax (GST) roll-out on July 1 this year.

However, experts believe growth will revive once business overcomes the teething troubles posed by the new GST regime and recovers from the after-shocks of demonetisation.

A Reuters' poll of economists estimated country's GDP growth at 6.4 percent for the July-September quarter.

Earlier in November, US-based rating agency, Moody's Investors Services upgraded India's sovereign bond ratings to 'Baa2' from its lowest investment grade 'Baa3', citing the government's "wide-ranging program of economic and institutional reforms".

Also, earlier this month, Finance Minister Arun Jaitley said the country's economy will soon start taking an upturn after recovering from the 'temporary blip' caused by the structural changes undertaken by the government.

"I think the bottoming out of the economy is complete and now it should start moving upwards. The global economy is also moving up," Jaitley said.

Moreover, many prominent Indian firms had posted their best profit growth in the September ended quarter after muted growth for the past six quarters, according to a Thomson Reuters report.

Reserve Bank of India (RBI), Governor Urjit Patel, said last month that signs of an upturn were visible and growth was likely pick up in coming quarters.

However, the capital market is on correction mode on Thursday, as the benchmark BSE Sensex trimmed by over 300 points, while Nifty fell about a 100 points, intraday.