India’s GDP has probably hit a new low in the last quarter. The early forecasts are showing a slump of below 5% expansion, according to a report in The Print.
Economists at State Bank of India, Nomura Holdings Inc. and Capital Economics Ltd. are predicting a growth of 4.2% to 4.7% for the last quarter. The government is likely to publish the data on November 29, says the report.
Sonal Varma, chief economist for India and Asia at Nomura in Singapore is predicting a growth of 4.2% for last quarter. “We now believe GDP growth did not bottom in the April-June period. High-frequency indicators have plunged and domestic credit conditions remain tight amid weak global demand," she said.
4.2% growth would be the lowest since a new base year has been adopted for calculating the GDP in 2012.
To boost growth this year, the RBI has cut interest rates 5 times and has given $20 billion of tax cuts for companies.
Soumya Kanti Ghosh, chief economic adviser at State Bank in Mumbai said, "We now expect larger rate cuts from RBI in December. However, such rate cut is unlikely to lead to any immediate material revival."
Shilan Shah, senior India economist at Capital Economics in Singapore is forecasting a 4.7% expansion. He said, “It is clear that the recovery in growth we have been forecasting has so far proved elusive.”
The GDP growth rate was 5% in the three months through June.