January-March quarter growth may have slumped to 6-6.3% against 6.6% expansion in the preceding one.
NEW DELHI: India’s economic growth is likely to have slipped below 7% in FY19, the lowest in the past five years, because of a disappointing fourth quarter. That could prompt a further cut in interest rates by the central bank and renewed efforts by the incoming government to drum up demand and private investment, experts said.
An ET survey of independent economists showed January-March quarter growth may have slumped to 6-6.3% against 6.6% expansion in the preceding one, pulling down the growth rate for the fiscal year.
In its second advance estimate for FY19 in February, the statistics office had estimated growth at 7%, implying 6.5% growth in the last quarter.
PROVISIONAL ESTIMATES TO BE RELEASED ON FRIDAY
Provisional estimates for FY19 will be released on Friday, a day after Prime Minister Narendra Modi takes the oath of office for a second five-year term at the head of his council of ministers.
China’s economy, in comparison, grew 6.4% in the quarter ended March.
“The economy is facing tighter financial conditions, weak global and domestic demand, with private consumption slowing materially,” said Kotak Mahindra Bank economist Upasna Bhardwaj.
Kotak Mahindra Bank expects fourth-quarter GDP growth of 6% and that for the full year at 6.9%.
“Leading economic indicators for the fourth quarter like IIP (index of industrial production), PMI (purchasing managers’ index), infrastructure index, auto sales and cargo have shown moderation in momentum,” said Shubhada Rao, chief economist at Yes Bank, pencilling in 6.2% growth for the quarter. “Global demand also remained soft amidst uncertainty on the trade war.”
The US and China have been unable to resolve their differences over trade and have imposed tariffs on goods.
The new government faces the task of quickly boosting consumer demand to revive growth while undertaking more structural measures to get private investment moving.
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