According to Ecowrap, a monthly report by the Economic Research Department of State Bank of India (SBI), India’s Gross Domestic Product (GDP) will grow at 4.2 per cent in the July-September quarter and at 5 per cent in the fiscal year 2019-20.
The full-year growth projection as predicted by the SBI is one of the lowest that any institution has predicted so far. It is also 1.1 per cent lower than its earlier prediction of 6.1 per cent.
Financial services firm Nomura’s forecast of 4.9 per cent GDP growth for the full year has so far been the lowest and most negative.
Low automobile sales, deceleration in air traffic movement, flattening of core sector growth, and declining investment in infrastructure and construction are the reasons cited by the report for such a low forecast.
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“Against such growth slowdown, it is imperative that India adheres to no negative policy surprises in sectors like telecom, power and NBFCs,” said the report.
Along with Industrial slowdown, the report also mentions slowed agricultural growth due to excess rains.
“Considering all these domestic parameters along with global downturn, we now foresee GDP growth at 5 per cent in the current fiscal,” the report said.
“We now expect larger rate cuts from RBI in December policy. However, such rate cut is unlikely to lead to any immediate material revival, rather it might result in potential financial instability…,” the report added.
While Fitch has forecast a growth of 5.5 per cent for India’s GDP for 2019-20, rating agency Moody’s has predicted it to be 5.8 per cent. According to World Bank, India will grow at 6 per cent in the fiscal year 2019-20 whereas according to the Reserve Bank of India (RBI) and International Monetary Fund (IMF), India will grow at 6.1 per cent in the fiscal year 2019-20.