The growth rate in India's Gross domestic product (GDP) in the July to September quarter can come down to less than 5 percent. Not only this, during the entire financial year 2019-20, GDP growth rate can come down to below 6 percent. This warning has been given in a report of State Bank of India (SBI).
Earlier, the Reserve Bank of India had said that GDP growth could be 6.1 percent in this financial year. Significantly, in the April-June quarter, India's GDP grew by 5.8 percent. GDP growth has slowed down due to reduced consumption, poor investment and poor performance in many sectors. Earlier, in the January-March quarter of fiscal year 2012-13, GDP growth was down from 5 percent to 4.3 percent.
The SBI EcoRap report states, 'We now have little hope about growth accelerating in the second quarter (July to September) of FY20. Out of the total 26 indicators in September, only 5 indicators are showing an increase. This indicates that there is still a significant reduction in demand in the economy and it may take time to improve. Looking at the key indicators, it now appears that GDP growth will be less than 5 percent in the second quarter.
However, it has been said in the report that GDP growth may increase in the second half of this year. It said that GDP growth could improve slightly from the third quarter on account of increased government spending and increased sales of companies.
In the past, several economists and surveys have released the estimate that the September quarter GDP will decline significantly. Nomura also said that the GDP for the September quarter could be less than 5 percent. Moody's Investors Services has lowered its estimate of GDP growth for the entire financial year from 6.2 per cent to 5.8 per cent.
The International Monetary Fund (IMF) has also lowered its GDP growth estimate for the year 2019 to 6.1 per cent. The Reserve Bank has lowered its GDP growth estimate from 6.9 to 6.1 percent in this financial year.
