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India Ratings and Research has lowered India’s GDP forecast for financial year 2019-20 to 6.1%

India Ratings and Research has lowered India’s GDP forecast for financial year 2019-20 to 6.1% 

On 10th October India Ratings and Research (Ind-Ra) reduced India's gross domestic product (GDP) forecast for 2019-20 to 6.1 per cent this has occurred for the second time in two months.

The Ind-Ra's agency revised its GDP growth estimate to 6.7 per cent from its earlier forecast of 7.3 percent recently i.e., August month. 

Key Points 

  • According to the agency’s latest report Ind-Ra has revised its FY20 gross domestic product (GDP) growth down to 6.1% following the Central Statistical Organisation (CSO) estimating FY20 GDP growth to be 5.0%, much lower than Ind-Ra's estimate of 5.7% . 
  • A slowdown in both urban and rural consumption demand growth is one of the key reasons for the downward revision of GDP in its August 2019 forecast.
  • Ind-Ra expects the GDP growth in the first half of the financial year 2019-20 to be 5.2% and forecasts it to recover to 6.9% in 2HFY20, mainly on account of the base effect.
  • In the month of September 2019 there was a slowdown in the consumption demand that was reflected in the Reserve Bank of India's consumer confidence index as well, which declined to 89.4.
  • The other indicator facts are that have worsened lately are aggregate capacity utilisation declining to 73.6 per cent.
  • Banking credit to commercial sector turning negative at Rs 1.28 lakh crore. 
  • Non-banking credit to commercial sector falling to Rs 2.19 lakh crore. 

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