Reportedly in yet another blow to the indian economy after Moody’s downward outlook, two reports compiled by the state-owned State bank of india (SBI) and Singapore’s DBS bank expressed concern about the slowdown in growth in the indian economy. When showing a declining trend, the sbi research report sharply cut the country’s gross domestic product (GDP) growth forecast to 5% for the financial year (FY) 2019-20, from its earlier projection of 6%, while DBS bank said that India’s July-September quarter GDP numbers could be crucial.
Reportedly Economic Research Department of the sbi said, “We expect Q2GDP growth at 4.2 per cent. Our acceleration rate for 33 leading indicators at 85% in october 2018 is down to just 17% in september 2019, with such a decline gaining traction from march 2019.” The sbi forecasted “On account of low automobile sales, flattening of core sector growth, declining investment in construction as well as infrastructure and deceleration in air traffic movements, the second quarter GDP growth rate is likely to slip down to 4.2%”.
Moreover it added, the growth rate in 2019-20 should be looked through the prism of synchronized global slowdown. Perhaps such rate cut is unlikely to lead to any immediate material revival, rather, it might result in potential financial instability as debt financed consumption against an increasing household leverage had not worked in countries and india cannot be an exception.
