Reuters poll: India's economy to expand 4.7% in September quarter

Daniel Fowler
November 29, 2019

Data from the Monitoring Center of the Indian economy showed that India had registered new investments worth Rs 1,200 billion in April-September, the lowest level in the world. absolute terms for seven years.

The Quarterly GVA at Basic Prices for Q2 2019-20 from "Manufacturing" sector grew by (-) 1.0 percent as compared to growth of 6.9 percent in Q2 2018-19.

The GDP recount slowdown used to be pronounced within the main quarter of FY20, the minister talked about.

The full year, the economy may end up with much lower GDP figures than estimated in the past unless the government pumps in money in the second half. We are in a virtual free-fallWe are in a virtual free-fall.

Earlier on Thursday, the government had told the Rajya Sabha that the Advisory Committee on National Accounts Statistics (ACNAS) has recommended that 2020-21 as the base year for calculating GDP. But why is the BJP celebrating?

Congress chief spokesperson Randeep Surjewala alleged that for the BJP, the GDP was "Godse Divisive Politics". "All in the perspective!"

Consumption, the traditional driver of growth, accounting for 70 percent of US GDP, increased 2.9 percent, with a strong gain in spending on durable goods such as vehicles and appliances, according to the data. One must note that even for the October month, core sector numbers aren't looking good. The GFCF figures have been falling in the consecutive quarters since the third quarter of FY19.

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However, the possible rate cut "is unlikely to lead to any immediate material revival, rather it might result in potential financial instability", the SBI cautioned in a recent report.

The state of our economy categorised as industry, agriculture, trade, jobs, taxes, monetary policy and fiscal policy have already been discussed at length by experts in this conclave. The sharp decline of GDP from 5 per cent in Q1 to 4.5 per cent in Q2 is worrisome. "Measures to stimulate demand needs to be taken immediately, in the absence of which counter cyclical actions may not bear fruit".

The root cause of this is the government's policy doctrine that seems to suspect every industrialist, banker, policy maker, regulator, entrepreneur and citizen.

"Luckily, rural belts have started showing early signs of mild recovery, thanks to improved cashflow prospects for farmers in a few states". For FY20, our real GDP forecast stands at 5.2 per cent, with risks to further downside. It has come significantly below that. This, of all the numbers, should be the major worry for the government since that indicates the capital formation on the ground is in bad shape.

"There should be a significant recovery in the second half". "We expect RBI to keep cutting rates". "But, it should step up spending and infuse more confidence and be more categorical on the NBFC front". Measures taken by the government should boost growth in H2, however we will closely monitor high-frequency data.

Amid the continued economic slowdown, many feel the Reserve Bank of India, the country's central bank, may go for another interest rate cut of 25 basis points next week.

While that could be due to companies stockpiling ahead of announced tariffs, it could also reflect slowing consumption.

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