World Bank retains India’s growth rate forecast for FY19-20 at 7.5%

Source:, Jun 05, 2019

The World Bank has retained its forecast of India’s growth rate at 7.5% for the current financial year.

In its Global Economic Prospects report, the World Bank also said growth rate is expected to remain the same for the next two fiscals.

“In India, growth is projected at 7.5 per cent in FY2019/20 (April 1, 2019 to March 31, 2020), unchanged from the previous forecast, and to stay at this pace through the next two fiscal years,” the World Bank said in its report.

According to the report, private consumption and investment will benefit from strengthening credit growth amid more accommodative monetary policy, with inflation having fallen below the Reserve Bank of India’s target.

Support from delays in planned fiscal consolidation at the central level should partially offset the effects of political uncertainty around elections, it added.

The outlook for South Asia over the forecast horizon is expected to remain solid, with regional GDP expected to expand to 6.9 per cent in 2019, 0.2 percentage point down from previous projections owing to downward revisions for Pakistan, but to pick up to 7 per cent in 2020 and 7.1 per cent in 2021.

The contribution of exports to economic activity is expected to remain weak with moderate global trade growth, the report mentioned.

The World Bank, in its report, observed that the main domestic risks to the outlook include a re-escalation of political turbulence amid elections in some countries (Afghanistan, Sri Lanka); fiscal slippages with expanding public spending; and a resurgence of non-bank financial sector funding issues.

Moreover, the Washington-based lender noted that “military skirmishes” between major South Asian countries in mid-February remained contained, and economic repercussions were minor. However, re-escalation of tensions between the two countries could increase uncertainty, depress confidence, and weigh on investment in the region – an apparent reference to the Pulwama terror attack and the retaliatory air strikes carried out by the Indian Air Force (IAF) in Pakistan’s Balakot.

It further stated that the Goods and Services Tax (GST) regime is still in the process of being fully established, creating some uncertainty about projections of government revenues.

In Sri Lanka, the World Bank said a rise in political uncertainty in the months leading up to presidential and parliamentary elections, which will take place in 2019 and 2020, respectively, could weigh on business confidence. In addition, recent security-related incidents could dampen investor sentiment and perceptions.

Another factor accounted for by the World Bank is uncertainty about the Brexit process, which possesses the ability to create a risk to some South Asian economies which have preferential trade agreements or generalised system of preferences with the European Union and significant exports to the United Kingdom, including India, Bangladesh, Pakistan, and Sri Lanka. A no-deal Brexit could have a significant impact on exports of those countries to the UK in the absence of new trade agreements, it contended.

GDP growth in Q4 likely to moderate to 6.1-5.9%

Source: Financial Express, May 27, 2019

Mumbai: The country’s economic growth in the fourth quarter ended March 2019 is expected to moderate to 6.1-5.9 per cent, which could pull down growth rate for the entire fiscal 2018-19 to below 7 per cent, according to a report by SBI.

The slip in GDP growth may force the Reserve Bank of India to move with a deeper 0.50 per cent cut in rates at its next review to propel the sluggish economy, the SBI Ecowrap report said Monday.

The growth could come at 6.1-5.9 per cent for the January-March period, getting the full-year growth to 6.9 per cent, an estimate by the economic researchers at the country’s largest lender SBI ahead of the announcement of official data on Thursday, said.

“We expect GDP growth for Q4FY19 at 6.1 per cent. GVA (gross value added) growth could be at 6 per cent or slip marginally below 6 per cent at 5.9 per cent. FY19 GDP growth will be at 6.9 per cent,” it said. Read the rest of this entry »

IMF cuts India’s growth forecast for 3 years

Source: The Economic Times, Apr 09, 2019

International Monetary Fund (IMF) has pared India’s growth forecast for the just-concluded fiscal and the next two years, citing softer recent growth and weaker global outlook, but expects the country to retain its place as the fastest growing major economy.

According to IMF estimates, India’s economy grew 7.1% in FY19 and is expected to accelerate to 7.3% growth this fiscal and to 7.5% in FY21. All the estimates are 0.2 percentage points less than its previous assessment in January.

The IMF numbers are higher than those of the Reserve Bank of India, which had last week cut its growth forecast to 7.2% for this fiscal and 7.4% for FY21. Read the rest of this entry »

RBI lowers GDP growth forecast to 7.2% for 2019-20

Source: The Economic Times, Apr 04, 2019

The RBI Thursday lowered the GDP growth forecast for the current fiscal to 7.2 per cent from the earlier estimate of 7.4 per cent amid probability of El Nino effects on monsoon rains and uncertain global economic outlook.

In its February monetary policy statement, the central bank had projected the GDP growth for 2019-20 at 7.4 per cent — 7.2-7.4 per cent in first half of the fiscal (April-September).

Since then, there are some signs of domestic investment activity weakening as reflected in a slowdown in production and imports of capital goods, it said after the three-day meeting of the Monetary Policy Committee (MPC).

“The moderation of growth in the global economy might impact India’s exports,” the central bank said.

On the positive side, the RBI said, higher financial flows to the commercial sector augur well for economic activity. Read the rest of this entry »

India’s GDP growth slips to 6.6 per cent in Q3

Source: The Economic Times, Feb 28, 2019

India’s GDP growth has slipped to 6.6 per cent in the third quarter of FY19.

The economy had grown 7.1% in the second quarter and 8.2% in the first quarter, logging 7.6% for the first half.

Weaker domestic and external demand are key factors behind the sub-7 percent growth. India would still be growing faster than China’s 6.4 percent growth in the same quarter.

Q1 has been revised to 8% from 8.2% earlier and Q2 has been revised to 7% from 7.12% earlier. Read the rest of this entry »

SBI Research pegs Q3 GDP at 6.6-6.7%

Source: The Economic Times, Feb 25, 2019

The economy is likely to grow at 6.6-6.7 percent in the third quarter and 7.2 percent for the full financial year, says report.

The yearly SBI composite index for February saw a marginally rise to 50.60 (a score of under 50 indicates negative growth).

The index remained volatile and declined to 11-month low of 46.10 (low decline) in February from 52.8 (moderate growth) in January.

“Based on the annual performance of these leading indicators, we are expecting GDP to grow around 6.6-6.7 percent in the December quarter, SBI Research said Monday. Read the rest of this entry »

Revised numbers for FY17, FY18 show economy grew much faster

NEW DELHI: India’s economy expanded at a much faster rate than initially estimated in the last two fiscal years, according to revised numbers released by the government, which show that growth remained high despite disruptions from demonetisation and the rollout of goods and services tax.

The statistics office on Thursday revised the growth rate for India’s gross domestic product for fiscal 2017 to 8.2% from the 7.1% reported earlier. The government had announced demonetisation on November 8, 2016, partly impacting the fiscal year through March 2017.

The growth estimate for fiscal 2018, the first full year after demonetisation and which also included the first nine months of GST, was raised to 7.2% from 6.7% in the first revised estimates for FY18. The data indicate a sharper slowdown between the two years than estimated earlier.

The gap widened to a full percentage point from 0.4 percentage point earlier.

Growth for FY16 was revised down to 8% from the 8.2% estimated earlier, partly magnifying the growth for FY17, the best year of growth for the Narendra Modi government.

The revisions are likely to further politicise the country’s statics, as they show the BJP-led NDA widening the lead over the previous UPA regime in terms of growth. The average growth in the five years of the NDA works out to 7.6% against 6.7% for the UPA-2, as per the back-series growth data released earlier this year.

“There is an all-round upward revision across all sectors, led by agriculture,” said DK Joshi, chief economist at Crisil.

The statistics offices said the revision was on account of use of latest available data on agricultural and industrial production, government expenditure, and also more comprehensive numbers from source agencies like the Ministry of Corporate Affairs and Nabard.
Read the rest of this entry »