FY20 GDP growth revised further down to 6.1%; recovery seen in 2HFY20

摘要

India Ratings and Research (Ind-Ra) has revised its FY20 gross domestic product (GDP) growth down to 6.1% following Central Statistical Organisation (CSO) estimating 1QFY20 GDP growth to be 5.0%, much lower than Ind-Ra's estimate of 5.7%. This is Ind-Ra's second downward revision; the agency revised its GDP growth estimate to 6.7% from its earlier forecast of 7.3% as recently as in August 2019. Although Ind-Ra had cited a slowdown in both urban and rural consumption demand growth as one of the key reasons for the downward revision of GDP in its August 2019 forecast, CSO's 1QFY20 estimate shows that the slowdown has been much sharper than Ind-Ra's expectation. It crumbled to 3.1% in 1QFY20 as compared to 7.2% a quarter ago and 7.3% a year ago. The GDP growth in 1HFY20 is likely to be 5.2%. Ind-Ra expects it to recover to 6.9% in 2HFY20, mainly on account of the base effect.