Initial estimates for third-quarter GDP point to a rebound in growth following the softer-than-expected gain in Q2, based on the median of nowcasts compiled by The Capital Spectator. The current estimate points to a real annualized 2.7% increase in output, according to the median nowcast. If confirmed when the official numbers are published, the gain would mark a solid improvement over Q2's modest 1.5% rise. To state the obvious, the nowcast should be viewed cautiously this early in the quarter, as the Bureau of Economic Analysis is scheduled to publish its preliminary Q3 GDP report on October 29. As reported by Investing.com India, a lot can happen between now and then, given the unsettled conflict in the Middle East and the resumption of US tariffs.
The nowcast should be viewed cautiously this early in the quarter, as the Bureau of Economic Analysis is scheduled to publish its preliminary Q3 GDP report on October 29. As reported by Investing.com India, a lot can happen between now and then, given the unsettled conflict in the Middle East and the resumption of US tariffs. All the more so given the current geopolitical uncertainties, estimating how these risk factors could influence economic activity remains precarious at best. Add in uncertainty about inflation's path and it's clear that confidence surrounding economic analysis remains a day-to-day affair.
Early numbers for Q3 look encouraging, with all nowcasts in the chart above printing above the 1.5% advance in Q2. According to reports from Investing.com India, stronger business activity in July, based on PMI survey data published by S&P Global Market Intelligence, shows an encouraging acceleration in economic growth at the start of the third quarter. Lower oil prices helped, thanks to reduced hostilities in the Middle East, though the relative calm appears to be precarious given recent fighting. For the moment, there's a reasonable case for expecting that growth will pick up in the current quarter, with the weeks ahead set to stress-test the durability of these initial Q3 numbers.
Some of the PMI-based rebound in July is linked to a one-time pop from the World Cup soccer games, as noted by Chris Williamson, chief business economist at S&P Global Market Intelligence. He indicates that the biggest improvement in demand in July was reported among consumer-facing service providers, spending on which surged at a rate not seen for over four years, linked to the FIFA World Cup and US Independence Day events. The renewed fighting in recent weeks suggests the relative calm is precarious, but the relative calm appears to be holding for now.
