ADB cuts India's FY20 GDP growth forecast to 6.5%
Wednesday - September 25, 2019 6:18 pm ,
Category : BUSINESS
New Delhi, Sep 25 (IANS) The Asian Development Bank (ADB) has revised its outlook for India's GDP growth for the financial year 2019-20 to 6.5 per cent from the previous projection of 7 per cent due to domestic reasons such as the pre-election decline in investment and tighter credit conditions.However, the Manila-based bank in its supplement to the Asian Development Outlook (ADO) released on Wednesday said that the growth may improve in FY 2020-21 to 7.2 per cent."India's growth forecast for fiscal year 2019-20 is lowered to 6.5 per cent after growth slowed markedly to 5 per cent in the first quarter, April-June," the ADB said."India is expected to rebound to 7.2 per cent growth in fiscal 2020-21 and join
most other subregional countries in performing at or near their ADO 2019 growth
forecasts for the next year," it said.Besides, the Manila-based bank said the contribution of investment in India's growth fell substantially because of subdued bank lending and uncertainty ahead of elections in April-May. The revised forecast comes a month after official data showed that severe slowdown in manufacturing activity in the country pulled India's GDP growth rate in the first quarter (Q1) ended June 30 down to 5 per cent, marking the fourth successive quarter of decline in growth.From 8 per cent in Q1 of 2018-19 to 5 per cent in this quarter, the GDP has fallen by 3 per cent in barely a year's time.On a sequential basis, the growth rate came lower than the 5.8 per cent in Q4 of 2018-19.Currently, a culmination of factors such as high GST rates, natural calamities, subdued farm produce prices, stagnant income levels and low job generation have led to the slowdown.Various sectors are facing a sales downturn. Industries such as fast-moving consumer goods (FMCG) and automobiles have been the hardest hit.
--IANS rv/arm
most other subregional countries in performing at or near their ADO 2019 growth
forecasts for the next year," it said.Besides, the Manila-based bank said the contribution of investment in India's growth fell substantially because of subdued bank lending and uncertainty ahead of elections in April-May. The revised forecast comes a month after official data showed that severe slowdown in manufacturing activity in the country pulled India's GDP growth rate in the first quarter (Q1) ended June 30 down to 5 per cent, marking the fourth successive quarter of decline in growth.From 8 per cent in Q1 of 2018-19 to 5 per cent in this quarter, the GDP has fallen by 3 per cent in barely a year's time.On a sequential basis, the growth rate came lower than the 5.8 per cent in Q4 of 2018-19.Currently, a culmination of factors such as high GST rates, natural calamities, subdued farm produce prices, stagnant income levels and low job generation have led to the slowdown.Various sectors are facing a sales downturn. Industries such as fast-moving consumer goods (FMCG) and automobiles have been the hardest hit.
--IANS rv/arm
