India Ratings and Research in its latest report has revised downward the India’s gross domestic product (GDP) growth to 6.7% (six-year low) from an earlier estimate of 7.3% for the current financial year (FY20) on account of slowdown in consumption demand, delayed and uneven progress of the monsoon so far, a decline in manufacturing growth and inability of Insolvency and Bankruptcy Code to resolve cases in a time-bound manner. It expects current financial year to be the third consecutive year of subdued growth.
It further said the rising global trade tension will also have an adverse impact on exports. Even on a quarterly basis, Q1 FY20 is expected to be the fifth consecutive quarter of declining GDP growth at 5.7%. The rating agency expects GDP growth to recover to 7.4% in the second half of FY20, mainly on account of the base effect.
Besides, it said the recent measures announced by the government to boost the economy are likely to support growth only in the medium term. Private consumption, which has been the mainstay of aggregate demand has come under pressure in urban as well as rural areas lately.