Cooling activity in manufacturing

Fitch Ratings has forecast India’s GDP growth at 6.9% for the current fiscal year ended Mar 2019, down from 7.2% previous projection, but sees the economy holding well in the years ahead.

For 2019-20, it sees growth at 6.8%, down from 7% projected previously.

“While we have cut our growth forecasts for the next fiscal year (ending March 2020) on weaker-than-expected momentum, we still see Indian GDP growth to hold up reasonably well at 6.8% followed by 7.1% in FY21,” Fitch said.

India’s economic growth has slowed down for the second consecutive quarter in the October-December period to 6.6%, after 7% and 8% in July-September and April-June periods, respectively.

Fitch attributed the slowdown to cooling activity growth in the manufacturing sector and, to a lesser extent, agriculture.

Autos and two-wheelers sales have dropped due to tighter credit availability and the two have been heavily dependent on non-bank financing companies.

“Weaker momentum has been mainly domestically driven,” Fitch added in its latest Global Economic Outlook on 22 Mar 2019.

India’s economic growth has slowed down for the second consecutive quarter in the October-December period to 6.6%, after 7% and 8% in July-September and April-June periods, respectively.

Fitch expects rupee to weaken to 72 to a dollar by the end of December 2019, and further to 73 by December 2020, from 69.82 to a dollar in the end of December 2018. fiinews.com