India's economy grew 4.7% in 3Q

See which sub-components provided crucial support.

According to DBS, 3Q fiscal year GDP numbers were out late Friday. The Indian economy expanded 4.7% YoY in 3Q (Oct-Dec13) slowing marginally from 4.8% the quarter before.

Here's more:

Adjusted for seasonal variations, growth was up 0.7% QoQ, easing from 1.2% in the first half of the year. For the first three quarters, growth stands at 4.6%, nearly flat from FY12/13’s revised 4.5%. Growth remains below 5% for the seventh successive quarter to Dec13.

The performance of the sub-components was along our expectations. Under the industry breakdown, agricultural output and higher disbursements under the community and social services (reflects government spending) provided crucial support.

Backed by improved sowing of the winter and summer crops, food grains production is expected to rise 2.4% this year, from 1% fall last year. In the first three quarters of FY13/14, the sector has accelerated to 3.7% from 1.9% in FY12/13.

Other key service categories – financial and business services stayed firm, lifting the sector up 7.9%, from 1H’s 6.8%. Manufacturing activity however emerged as a key drag, down -1.9%, decelerating from 1H’s -0.1% and last year’s 2%.

This sluggishness also extended to mining (-1.6%) and utilities at the margin. Including construction, the overall industrial sector slowed notably to 0.5%, more than halving from 1H’s 1.9%.

Under the expenditure breakdown, private consumption benefited from higher rural incomes, while non-rural discretionary spending stayed subdued.

The component accordingly rose 2.6% from 1.9% in the first half. Government spending rose 4%, shaking off the modest downtick in the quarter before. This component however is expected to emerge as a notable drag in the Mar quarter as spending was sharply restrained to meet challenging annual targets.

Capital formation continued to lose momentum, slipping 1.1% and taking the year-to-date growth to barely above water. Net exports growth maintained a similar pace as quarter before. Export growth slowed, but the trade account benefited by a sharper decline in merchandise imports.