Indian economy no longer growing faster than China as Q4 GDP expansion hits 5-year low
By: FE Online | Updated: May 31, 2019 6:45:06 PM The Financial Express
The Indian economy is no longer the growing faster than China as the GDP growth for Q4FY19 hit a 5-year low, the government data showed.
The Indian economy is no longer the growing faster than China as the GDP growth for Q4FY19 hit a 5-year low, the government data showed. China had posted 6.4 per cent growth in the March quarter of FY19. The GDP grew at 5.8 per cent in the fourth quarter of FY19, even as the full fiscal 2019 saw a growth rate of 6.8 per cent, the Central Statistics Office (CSO) data showed. The numbers hold significance for new Modi government which was re-elected with a massive mandate in 2019 general elections, amid concerns of slowdown hitting the economy. In the second and first quarter of the previous fiscal, the economy grew at 7.1 per cent and 8.2 per cent, respectively, logging 7.6 per cent for the first half of FY19. The GDP data highlight the overall economic growth of the economy over a particular period. It is the sum total of the value added of all the companies, sectors and individuals in the economy.
In the latest research report, the country’s largest lender State Bank of India (SBI) predicted that the Q4FY19 would see growth moderating to 6.1-5.9 per cent. The GDP growth slowdown is likely to bog down the growth rate for full FY19 to below 7 per cent, the SBI Ecowrap added. Similarly, a report by rating agency India Ratings and Research estimated the GDP growth to print 6.9 per cent, marginally lower than CSO’s advance estimate of 7 per cent. The government should take short-term measures to reverse the economic slowdown, it noted. The industry body FICCI, in its latest survey, estimate the fourth quarter GDP FY19 growth at 6.5 per cent. The GDP growth forecast by the industry body for fiscal 2020 stands at 7.1 per cent and the projection for FY21 has been kept at 7.2 per cent.
The Reserve Bank of India (RBI) is expected to cut the repo rate in its upcoming June monetary policy to boost liquidity in the system amid slowdown fears. According to a Reuters poll of economists, the central bank may cut rates at the third consecutive meeting next month.