gdp, india gdp, gdp fy18 forecast, smes, small medium enterprises, sme survey, american express survey for sme, india news, gdp forecast, gdp projection
A worker of an ice factory loads an ice bar onto a truck on a hot summer day on the outskirts of Ahmedabad, India, May 13, 2016.Reuters file

India's macroeconomic data is disappointing, Japanese rating agency Nomura said. The consumer price index (CPI) inflation surged to 15-month high to 4.9 percent in November from 3.6 percent in October.

The higher inflation number is mainly led by higher food prices (vegetables, eggs), and fuel (LPG). The rise in core inflation, even adjusting for house rent, suggests that broad-based price pressures continue even as the GST effects have faded, according to the Nomura report.

Even industrial production growth slowed down to 2.2 percent in October from 4.1 percent in September, reflecting a number of transitory factors like frontloaded shipments in September and early onset of the festive season.

According to the report, the country's growth is largely in-line with expectations and high frequency data suggest that industrial output growth should rebound in November. "We expect GDP growth to rise to 6.7 percent y-o-y in Q4 from 6.3 percent in Q3, before rebounding to 7.5 percent in 2018," the report stated.

However, on inflation, there has been a fair bit of concerns with food price inflation pressures having affected in December owing to unseasonal rains and higher oil prices.

"CPI inflation print is slightly negative for rates markets as it came in higher than market expectations. The increase in core inflation was more broad-based than we had expected. Our measure of 'super core' (CPI ex-food and beverages, fuel, housing rent, petrol and diesel prices) inflation inched up to 4.2% y-o-y from 3.9% in October," said the Nomura report.

The report expects near-term pressures on inflation to remain on the upside. Even after GST Council slashed GST rates for over 178 items, the rating agency believes that the move won't be much effective now as this will be more than the offset caused by higher food prices.

"Unseasonal rains owing to cyclone Ockhi have damaged horticulture crops (fruit and vegetables) and some of the standing rabi (winter) crops, which will push food price inflation even higher. December CPI inflation is currently tracking above 5.5 percent," the Nomura report stated.