The government is set to release India’s gross domestic product (GDP) numbers for the second quarter of fiscal 2019-20 at 5:30 pm on Friday. The Indian economy had expanded at 5% in the first quarter of the fiscal year, its slowest annual pace since 2013. Now, for the second quarter, economic growth is expected to have declined even below 5% on the back of weak consumer demand, slowing factory activities and negative impact of the prolonged monsoon. Here’s what various analysts are expecting from Q2 GDP numbers:
— Indranil Pan, chief economist at IDFC First Bank, says Q2 FY20 GDP growth could be at 4.5%. “After the 5% data for Q1, we were looking at a 5.3% number (for Q2). But after looking at all lead indicators, we are now at 4.5% in terms of GDP number for Q2 FY20,” he said. “One key lead indicator will be government expenditure… the government has been forwarding its expenditure pattern in a significant way in Q2 and that probably will have a buffering effect on the downside bias that GDP has,” Pan added.
— Ratings agency ICRA expects India’s growth rate to fall to 4.7% in Q2 of FY20 amid weak demand and tepid investment. The firm also sees the country’s gross value added (GVA) at basic prices growing 4.5% for the quarter. “ICRA expects the GVA growth to decline to 4.5% in Q2 of FY2020 from 4.9% in Q1 of FY2020, primarily led by industry,” said Aditi Nayar, principal economist at ICRA.
— Fitch group firm India Ratings and Research said India’s Q2 FY20 GDP growth is likely to come at around 4.7%. “India Ratings and Research has also revised its full-year GDP growth forecast for FY20 to 5.6%. This is the fourth revision and has come in after the agency had revised its FY20 GDP growth forecast only a month ago to 6.1%,” the rating agency said in a statement.
— DK Joshi, chief economist at Crisil, said GDP growth in Q2 is likely to be lower than that in Q1. He said, “The short-term indicators whether it is industrial production, exports, bank credit, tax collections, freight movement, electricity production, credit, everything is weaker than the first quarter. Inflation has spiked but core inflation is down which confirms that there is weakness in demand. So Q2
is going to be definitely lower than Q1.”
— Singapore’s DBS Bank said that India’s economic growth is expected to slow further in the second half of the year. “Real GDP is likely to print 4.3% year-on-year in September quarter vs June quarter’s 5%, nearing the trough for this cycle,” DBS said, adding that weakness in the crucial consumption sector is likely to be extended into the quarter along with tepid private sector activity.
— A CNBC-TV18 poll projected Q2 GDP growth of 4.64% and GVA growth of 4.2%. According to the poll, FY20 GDP growth is expected to come in at 5.25% compared with 6.8% in the last fiscal.
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