Contact Your Financial Adviser Money Making MC
26 February 2019
 |
| Growth
(The Total Investment & Insurance Solutions) |
India's economy likely grew at its slowest
pace in over a year in the October-December quarter as weaker rural incomes and
softer urban demand weighed on consumption, a Reuters poll showed. The median
forecast from more than 55 economists polled on Feb. 19-25 was for growth of
6.9 percent, compared with 7.1 percent in July-September. "Consumption
drivers should remain modest as tight liquidity persisted through most of the
quarter and farm distress restrained rural consumption," said Charu
Chanana, emerging Asia economist at Continuum Economics
Forecasts for the GDP number, due for release
on Feb. 28 at 1200 GMT, ranged between 6.3 percent and 7.9 percent, and
suggested a significant drop from a more than two-year high of 8.2 percent in
April-June 2018. The latest poll was conducted amid political uncertainty ahead
of a general election due by May and a weakening global economy. A slowdown in
growth momentum supported the Reserve Bank of India's sudden dovish turn in
early February when it cut rates and changed its policy stance to
"neutral" to boost expansion after a sharp fall in inflation. The Total Investment & Insurance
Solutions
However, global uncertainty over trade
conflicts, Brexit and oil prices could add to growth headwinds in India, the
RBI's Monetary Policy Committee said. "The RBI's commentary on growth and
the upcoming GDP data should support the central bank's surprise cut... there
should be more dovishness in the next meeting, because of the ongoing
slowdown," said Shashank Mendiratta, economist at IBM. A slowing economy could
be a concern for Prime Minister Narendra Modi's government, which wants to
boost lending and lift growth before the election. In its final budget for this
term, the government introduced several tax cuts to support spending and growth
in a bid to lure middle-class voters.
"I think their stance from here would be
to show that they have pulled out all the stops and that they've got a few more
rabbits to pull out of the hat if they were to win the election," said
Vishnu Varathan, head of economics and strategy for Asia at Mizuho Bank. Gross
value added growth (GVA), the government's preferred measure, is expected to be
6.7 percent in the October-December quarter, marginally down from 6.9 percent
in the previous three months.
No comments:
Post a Comment