India’s economy is expected to grow below 5 percent

Bisnis.com, JAKARTA – growth Indian economy is expected to hit a new low in the third quarter of 2019. A number of economists estimate that the Hindustan state economy will grow below 5 percent.

Economists from the State Bank of India, Nomura Holdings Inc. and Capital Economics Ltd. lowered their growth forecasts for the third quarter of 2019 to 4.2 to 4.7 percent.

The 4.2 percent growth would be the lowest since the authorities adopted a new base year for gross domestic product (GDP) in 2012.

The government is expected to release its official data on November 29th. In the previous quarter, which ended in June 2019, the Indian economy expanded 5 percent, the lowest in six years.

“We are now confident that GDP growth will grow [India] did not bottom out in the period from April to June, “said Sonal Varma, chief economist for India and Asia at Nomura, who is forecasting growth of 4.2 percent for the third quarter.

“High frequency indicators have fallen and domestic credit conditions remain tight amid weak global demand,” he added. Bloomberg, Wednesday (November 20, 2019).

The Reserve Bank of India (RBI) cut its key interest rate five times this year to stimulate growth, with monetary easing complemented by fiscal measures, including a $ 20 billion corporate tax cut.

“We now expect a bigger rate cut by the RBI in December,” said Soumya Kanti Ghosh, chief economic advisor at the State Bank of India in Mumbai.

“However, it is very unlikely that such a rate cut would result in an immediate material recovery,” continued Ghosh. Together with Varma, he is forecasting growth of 4.2 percent.

Last week, Treasury Secretary Nirmala Sitharaman said it was too early to say if the slowdown was over. The companies should plan new investments, the realization of which may take some time.

“We doubt the boost will be enough to offset weakness in other areas,” said Shilan Shah, chief economist for India at Capital Economics, who is forecasting 4.7 percent growth.

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