HSBC further slashes India’s growth forecast for FY13, FY14

Citing slowdown in the economy turning to be more structural than cyclical, HSBC has slashed India’s growth forecast for this fiscal year and next fiscal to 5.2% and 6.2% from 5.7% and 6.9% respective projections earlier. In its report, HSBC also underscored more time for reforms process and another three years for Indian economy to return to 8% growth on a sustained basis. HSBC had previously cut its India growth forecasts for fiscal 2013 and 2014 in September.

Two days prior, Fitch, citing concerns about slowing economic growth, persistent inflationary pressures and an uncertain fiscal outlook also reiterated its 'negative' outlook on India's sovereign credit rating. The warning came right after data last week showed the country's current account deficit widened to a record high during the April-November period.

Meanwhile, credit rating agency, CRISIL pegged India’s growth rate at 6.7% in 2013-14 from a projected rate of 5.5 percent in the current financial year on a revival in consumption. A pick-up in agriculture, predicated on a normal monsoon, lower interest rates and higher government spending will support private consumption demand, the rating agency said.

However, earlier in December, Morgan Stanley upped India's growth forecast for the current financial year to 5.4 percent from 5.1 percent projected earlier reasoning better than expected GDP growth in the September quarter and stabilization in non-agriculture growth indicators.