In a televised address, RBI Governor Shaktikanta Das said the global economy is heading into recession. He also said inflation outlook is "highly uncertain".
Asia's third-largest economy began slowing last year, but a countrywide lockdown implemented by Prime Minister Narendra Modi on March 25 halted economic activity completely.
Last year the target was a range of between 6 per cent and 6.5 per cent.
India's GDP could marginally expand 1.5% or even contract 0.9% in this financial year, the Confederation of Indian Industry (CII) said in a report and suggested several measures to address the economic challenges posed by the Covid-19 pandemic.
The agency says prospects of further reforms to support business have diminished.
Moody's had, in November 2019, downgraded India's outlook to negative from stable on concerns of lower economic growth. The agency had, however, affirmed country's 'Baa2' rating. In its update to the November forecast released on Friday, the agency said India's credit profile is supported by its large and diverse economy, and stable domestic financing base.
In a note on Monday, Ind-Ra revised its economic growth estimate for the country from its forecast of 3.6 per cent published on March 30, 2020 to to 1.9 per cent.
India has seen a recession only thrice, in fiscals 1958, 1966 and 1980.
‘The quantum of loss that will percolate down to the financial system is unknown at this stage’
According to the SBI's research report – Ecowrap - the gross domestic product (GDP) growth is likely to be 4.2 per cent for FY20 and (-) 6.8 per cent for FY21. The fourth quarter GDP growth number for FY20 will be announced by the National Statistical Office (NSO) on May 29.
Earnings estimates for FY2021-22 have already seen sharp cuts in recent weeks.
While Governor Shaktikanta Das acknowledged that GDP growth would likely remain in the negative territory in 2020-21, he also announced an extension of the moratorium on payment of installments to all term loans till August 31.
Since the outbreak of the crisis, which has seen the country being put under a 40-day lockdown, watchers have been warning about a heavy toll on the economy, with some analysts also expecting the GDP to contract in 2020-21.
The IMF on Tuesday projected a GDP growth of 1.9 per cent for India in 2020.
The report estimated sharper de-growth in the first and second quarters of FY21 at -25% and -2.1% respectively, down from a range of 16%-20% contraction in Q1 and 2.1% growth in Q2 before. With two consecutive quarters of contraction, it implied the economy was in recession.
"India's response to the COVID-19 crisis lacks major or innovative near-term fiscal support, and fails to provide the much-needed impetus to stimulate growth and kick-start economic growth," Credit Suisse Wealth Management's Head (India Equity Research), Jitendra Gohil, said.
In the baseline scenario, the Gross Domestic Product (GDP) is expected to grow at just 0.6 per cent on an annual basis as economic activity is expected to remain constrained due to continuing restrictions on the free movement of goods and people beyond the lockdown period.
While Nomura has forecast recession-three consecutive quarters of recession, Goldman Sachs, Bank of America, UBS and HSBC have been less harsh with economy contraction forecast ranging from 0.1 per cent and 3.5 per cent.
"The package may fall short of mitigating the near-term challenges for some businesses, but it is better designed to improve India's medium-term growth potential and attract long-term risk capital," analysts at the Japanese brokerage Nomura said. They also added that there are no "silver bullets" in the package.
Fitch Solutions on Monday cut India's economic growth forecast for the financial year 2020-21 to 1.8 per cent saying private consumption is likely to contract due to large-scale loss of income in the face of worsening domestic outbreak of COVID-19.
FM Nirmala Sitharaman Sunday announced the fifth and final tranche of the Rs 20 lakh crore relief package. Experts agreed that most of the expenditure was contingent and the measures were largely regulatory and the government’s immediate additional expenditure would be minimal.
The slump may have reached its bottom with India's growth expanding at 4.7% in the quarter ended December 31, compared to the previous quarter. The economy had grown at an over six-year low of 4.5% in the previous quarter. In line with expectations, India's GDP growth rate bottomed out during the third quarter of the current fiscal and inched up to 4.7 per cent from 4.5 per cent reported for the previous quarter. India’s GDP growth in full FY19 had stood at 6.8 per cent.India's Q3 FY20 GDP growth inches up at 4.7% vs 4.5% in previous quarter
Even as India slowly starts going back to work, the country has reported just shy of 10,000 cases in the last three days, with 3,380 of them being reported in the last 24 hours.
The GDP growth was below a revised - and greatly increased - 5.1% growth rate for the previous quarter.
After keeping the country under a 40-day lockdown to arrest the spread of coronavirus, the government extended the lockdown till May 17 with a slew of relaxations to the unaffected areas in order to kick-start economic activity.
Fitch Solutions joins a chorus of international agencies that have made a similar cut in growth estimates in recent days. Standard and Poor's (S&P) last week cut its estimate for India's GDP growth in 2020-21 to 5.2 per cent from its earlier estimate of 6.5 per cent. Fitch Ratings slashed its growth forecast from 5.6 per cent to 5.1 per cent for 2020-21.
MPC will continue with the accommodative stance as long as it is necessary, says RBI.
In April-June, we are expecting a contraction of 5%, says Deutsche Bank's Chief India Economist.
The real GDP growth will slow to under 2.5 per cent for the June 2019 quarter, from the estimate of 4 per cent for March, it said.
As India completes a month under lockdown, the country reported 21,700 cases, with 1400 cases being added in the last 24 hours. Testing in the country has gone up 33 times in the last 30 days, the govt said today.
Fitch has slashed India's growth projections to 0.8 per cent in the current fiscal.
The National Statistics Office has forecast India’s GDP growth to slip to an 11-year low of 5% in FY20. Manufacturing growth in 2019-20 is seen at 2% year on year, which is a 15-year low, as against 6.9% growth in FY19. Construction growth is seen slipping to a six-year low of 3.2% in FY20 from 8.7% in the last fiscal.
The Budget expects nominal GDP growth of 10 per cent in the next fiscal , followed by 12.6 per cent and 12.8 per cent in FY22 and FY23, respectively. Even before the significant slowing in economic expansion in 2019, nominal GDP growth had averaged about 11 per cent over the five years from 2014 to 2018.
Experts say there’s a case for printing money and overseas borrowing to deal with the unprecedented economic meltdown, and suggest that the stimulus be around 9% of GDP.
The Economic Survey, released a day before Finance Minister Nirmala Sitharaman presented Union Budget for 2020-21 on February 1, had projected a GDP growth of 6-6.5 per cent, up from 5 per cent estimate for 2019-20.
Chief Economic Adviser K V Subramanian said the Indian economy has bottomed out and it will see an uptick from here on.
It is for the second consecutive time that NSO's GDP estimate is significantly lower than the projection made in the survey prepared by the finance ministry.
"Real GDP or GDP at constant (2011-12) prices for the years 2018-19 and 2017-18 stand at Rs 139.81 lakh crore and Rs 131.75 lakh crore, respectively, showing growth of 6.1 per cent during 2018-19 and 7.0 per cent during 2017-18," the National Statistical Office said in revised national account data released on Friday.
The Economic Survey has ruled out any misestimation of India’s gross domestic product (GDP) in the wake of the recent debate about possible overestimation of growth rates following the revision in methodology in 2011.
The brokerage's economist Tanvee Gupta Jain said even though there are only over 50 positive coronavirus cases in India so far, the fear and uncertainty over its impact could worsen near-term consumer sentiment and hit domestic demand. The brokerage also cut its FY20 growth estimate marginally to 4.8 per cent.
India’s economic growth slipped to a 26-quarter low of 4.5% in July-September from 5% in the first quarter. The statistics office lowered the FY19 GDP growth rate to 6.1% from the provisional estimate of 6.8% and has forecast 5% growth in FY20, its slowest pace in 11 years.
Annual gross domestic product growth likely rose to 4.7% in the last quarter of 2019 from 4.5% the previous quarter, when the growth rate appears to have bottomed out, a Feb. 18-24 Reuters poll found. About 90% of economists in the poll forecast growth for the October-December quarter at 5% or below.
With the nation's coronavirus numbers surging past the 10,000-mark, Prime Minister Narendra Modi puts 130 crore Indians on the appraisal of their lives. Meanwhile, Barclays says India's lockdown extension will inflict an economic loss of $234.4 billion, and result in stagnant GDP. All this and more in Tuesday's news wrap.India lockdown day 21 wrap: Here's a roundup of all the top developments
India’s limited presence in global supply chain a blessing in disguise.
According to the latest OECD forecasts, India's real GDP growth is expected at 5.1 per cent.
Odisha decides to extend lockdown till April 30, becoming the first state in the country to do so. Meanwhile, a UN report says India's GDP growth for the current fiscal is expected to slow down to 4.8 per cent. All this and more in Thursday's wrap. Watch now.India lockdown day 16 wrap: Here's all you should know
India's GDP growth for the fiscal year 2019-2020 was estimated at 5 per cent and is forecast to slow down to 4.8 per cent for the current fiscal 2020-21. Economic growth for the country could stand at 5.1 per cent for fiscal year 2021-22, the report said. The report noted that these are very preliminary forecasts based on the data and information available up to March 10.
The FM said "steadiness" in economy is a good sign, soon after the official data showed Q3 GDP at 4.7%.
India's Q3 GDP growth rate stood at 4.7 per cent, official data showed on Friday.
The GDP growth will stay flat at 4.5 per cent in the October-December 2019, economists at SBI have said.
The pessimists among us are already afraid of a protracted tragedy that could lead to a deep recession.
Gross domestic product is estimated to grow 5.0% in FY20, slower than the 6.8% growth in FY19.
Some of the private banks witnessed 3-10 per cent reduction in their deposit base since the imposition of the moratorium on Yes Bank.
The large-scale manufacturing sector in the country witnessed a decline of 5.9 per cent in Q1-FY20 on YoY basis. This contraction was broad-based, as construction-allied industries, petroleum and automobile industries continued on downward path.
India’s aspirational growth of 6-7% depends on risk capital and strong corporate governance code, Kotak said.
For the first time, I see risk taking. People want to make money and wealth creation is not a bad word. When I was growing up in India in the 70s, it was not fashionable to be a businessman and now it is a cool thing to be a businessman, says Raj Sharma, Managing Director, Private Wealth Advisor, Merrill Lynch.
Moody's Investors Service on Friday slashed its estimate of India's GDP growth during 2020 calendar year to 2.5 per cent from an earlier estimate of 5.3 per cent, on account of the rising economic cost of the coronavirus pandemic. This compares to 5 per cent growth in 2019.Moody's cuts India's economic growth in 2020 to 2.5% from 5.3%
The lockdown has resulted in closure of businesses and unemployment for thousands of workers.
Crisil slashes India's growth rate by 170 bps. Next fiscal growth to fall by 3.5%.Crisil slashes India's growth rate by 170 bps
Ongoing global risk-off sentiment and steep monetary easing will pressure the rupee weaker.
Fitch said growth will gradually recover to 5.6 per cent in FY21 and 6.5 per cent in the following year.
There is a clamour for increased government spending to give a thrust to the slowing Indian economy and spur private investment that has historically helped GDP grow faster than public investment. But public investment always comes with the risk of crowding out of private investment.
Ind-Ra expects GDP to grow at 5.5% year-on-year in FY21, however, the downside risks persist.
BofA has cut India's June quarter growth forecast by 90 bps to 3.1% and full-year target to 4.1% for FY21.
Growth could be hit as demand has cooled with slow employment growth impacting consumption, co expects 6.6% for ’20 and 6.7% in ’21.
Moody's expects economic growth to pick up in 2020 and 2021 to 6.6 per cent and 6.7 per cent respectively.
This would take the policy repurchase (repo) rate to 3.40 per cent and 3.00 per cent, respectively.
Mukherjee, who also served as the finance minister in the UPA government, further said there is nothing wrong in public sector banks needing capital infusion. "I am not worried over the slow rate of GDP growth in the country. Certain things happening will have its impact," he said while addressing an event at the Indian Statistical Institute (ISI).
As per findings of the World Bank, low-emission and resource-efficient greening of India’s economy is possible at a very low cost in terms of GDP growth.
Sitharaman said receipts for 2020-21 are pegged at Rs 22.46 lakh crore while expenditure at Rs 30.42 lakh crore.
"India's growth is now seen at a slower 5.1 per cent in fiscal year 2019-20 as the foundering of a major non-banking financial company in 2018 led to a rise in risk aversion in the financial sector and a credit crunch. Also, consumption was affected by slow job growth and rural distress aggravated by a poor harvest," Asian Development Bank said.
Care Ratings has conducted a survey on the impact of the coronavirus pandemic on the economy among over 150 CEOs, CFOs, investors, analysts and other stakeholders from manufacturing, financial services, infra, realty and services between March 5 and 12. According to the survey, the economic impact will be significant and long term if the virus continues for longer.
The Economic Survey on Friday projected India's economic growth at 6 per cent to 6.5 per cent in the next financial year starting April 1, saying growth has bottomed out. The growth in 2020-21 compares to a projected 5 per cent expansion in 2019-20.Economic Survey 2020: GDP growth seen at 6-6.5 per cent for 2020-21
The Survey this year has been printed in lavender colour - the same as the colour of the new 100 rupee currency note, the oldest currency note in circulation in the country.
In the worst case, the virus will spread havoc for a year. In that extreme case, tens of millions may die.
The biggest assumption that everyone seems to be making is that a miracle will happen.
A granular look reveals the disarray: All lead indicators point to a dismal manufacturing growth.
"The aspirational growth rate could be between 6.5 per cent to 7 per cent. At this stage it will be difficult to attain nine per cent GDP growth," he said. "This year the growth rate will end at five per cent and this is real and not nominal ... Next year, the GDP growth rate could be anything between 6 to 6.5 per cent," Debroy added.
Former prime minister Manmohan Singh said on Friday the GDP growth rate of 4.5 per cent was unacceptable and worrisome, and urged his successor Narendra Modi to set aside "deep-rooted suspicion" of society and nurse India back to harmonious, mutually trustworthy society that can help the economy soar.4.5% GDP growth rate unacceptable, worrisome: Manmohan Singh
Moody's Investors Service on Monday cut its growth forecast for India to 5.3 per cent for 2020 from 5.4 per cent estimated earlier, as it expects the coronavirus outbreak to dampen domestic demand globally. In its update on Global Macro Outlook for March, Moody's said the virus outbreak has spread rapidly outside China to a number of major economies.Covid-19 outbreak: Moody's cuts India growth forecast to 5.3% from 5.4%
MCX Gold (Feb) futures were up 0.17 per cent to Rs 37,829.
In its update on Global Macro Outlook for March, Moody's said the virus outbreak has spread rapidly outside China to a number of major economies. "It now seems certain that even if the virus is steadily contained, the outbreak will dampen global economic activity well into Q2 of this year," it said.
Compared with men, women’s earnings are just 83% of the equivalent male full-time workers.
ICRA's principal economist, Aditi Nayar, sheds light on what may hurt the second-quarter GDP growth which will be released on Nov 29. She talks about the pain points, hurting investments and the factors driving down demand. Watch.Lead indicators point to disappointing Q2 GDP growth: Aditi Nayar
The ICRA also forecast the country's GVA at basic prices in year-on-year (YoY) basis to 4.5 per cent respectively.
There is a worry that credit demand is weaker than before, says Indranil Sen Gupta.
The real problem facing India and the world economy will be growth, not inflation.
He gave examples of growth in ridership of metro, ride sharing services to back his claim.
The Delhi-based NCAER has pegged GDP growth at 4.9 per cent as against 6.8 per cent in 2018-19. Going forward, NCAER said the monetary policy measures are unlikely to revive growth at this juncture and suggested providing fiscal stimulus, which too can be challenging unless it can be financed through better revenue generation.
Economy will fare slightly better in the Dec quarter, before suffering a relapse due to the impact of coronavirus.
The first advance estimates of the GDP growth for FY20 are being pegged at 5 per cent. The GVA estimate is being put at 4.9 per cent.The numbers are released at a time when the Indian economy has seen a sharp slowdown in growth, surprising policy-makers.The Indian economy grew at a six-year low of 5 per cent and 4.5 per cent, respectively, in the quarters ending June and September.GDP growth rate for 2019-20 estimated at 5% against 6.8% in FY19
Nifty is now stone’s throw away from the February low of 11,614, which is a key support.
India has entered a major economic slowdown. The growth number understates the magnitude of the slump.
Hanke, who currently teaches applied economics at Johns Hopkins University (USA), pointed out that India experienced an unsustainable credit boom, and now the chickens are coming to roost with a massive pile of non-performing loans piled up, primarily at the state-owned banks.
The telecom story can be a precursor to other sectors, especially banking and financial services.
India’s banks and non-banking finance companies (NBFCs) will continue to face a difficult operating environment due to a slowdown in the macro economy and weak funding conditions, credit rating agency Fitch said.
Moody's Investors Service on Monday slashed India's growth forecast to 5.4 per cent for 2020 from 6.6 per cent projected earlier on slower than expected economic recovery. In its update on Global Macro Outlook, Moody's said India's economy has decelerated rapidly over the last two years and expects economic recovery to begin in the current quarter.Moody's cuts India growth projection to 5.4% for 2020
In its update on Global Macro Outlook, Moody's said India's economy has decelerated rapidly over the last two years and expects the economic recovery to begin in the current quarter.
Fitch, which had in June this year put India's GDP growth at 6.6 per cent for the fiscal year that began in April 2019, said the recent government measures to boost economy including a cut in corporate tax rates will gradually nudge growth.
Former finance minister P Chidambaram on Tuesday took a dig at the NDA government over the slump in GDP, which has dropped to a six-year low of 5 per cent in the April-June quarter. Minutes after Chidambaram stepped out of the courtroom, when journalists asked what he had to say about his CBI custody, Chidambaram quipped, "Five per cent. Do you know what is five per cent?" P Chidambaram mocks govt on 5% GDP growth
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