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OECD cuts India’s GDP growth forecast to 5.9% for 2019-20

20 Sep 2019 Evaluate

Expressing concern over India’s economic growth, the Organisation for Economic Co-operation and Development (OECD) in its latest economic outlook, analysis, and forecasts has slashed the country’s gross domestic product (GDP) growth forecast by 1.3 percentage points to 5.9 per cent for 2019-20 from 7.2 per cent projected earlier. For the next year, the OECD has projected the Indian economy to grow 6.3 per cent, bringing down its earlier forecast by 1.1 percentage points.

The OECD cut India's growth for FY20 following the latest data, which showed that the country's economy expanded by just 5 per cent in the first quarter of 2019-20, the lowest in over six years. It said GDP growth in India has proved surprisingly weak in the recent quarters with consumer spending having slowed and tight financial conditions restraining investments. It added that lower interest rates and stronger benefits from reform efforts should all help private sector demand to strengthen.

India is among seven countries whose economic growth projections are cut by the OECD by more than 0.6 percentage points. The other countries are Argentina, Brazil, Saudi Arabia, South Africa and Australia. On the global front, the policy forum said the trade war between the US and China has sent global growth momentum tumbling toward lows last seen during the financial crisis. The OECD predicted that the global economy will see its weakest growth since the 2008-2009 financial crisis, slowing from 3.6 per cent last year to 2.9 per cent this year; it predicted 3 per cent growth for the next year.


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