GDP growth in Q4 seen at 6.5%, annual growth 7.1%

Last Updated: Fri, May 31, 2019 10:41 hrs
GDP

New Delhi: The gross domestic product (GDP) in the fourth quarter of 2018-19 (Q4FY19) is likely to be 6.5 per cent and the 2019-20 annual growth 7.1 per cent, according to a Ficci estimate, released here on Thursday.

The minimum and maximum growth have been estimated at 6.8 per cent and 7.3 per cent, respectively, for FY20 by the industry body. The Economic Outlook Survey of Ficci has predicted annual median GDP growth for FY20 at 7.1 per cent and FY21 at 7.2 per cent.

The official growth numbers for the fourth quarter will be released on Friday.

The minimum and maximum growth estimate stood at 6.8 per cent and 7.3 per cent, respectively, for FY20, it said attributing the estimates to economists from the industry, banking and financial services sectors.

The FY20 median growth for agriculture and allied activities has been forecast at 3 per cent and industry and services sectors are expected to grow 6.9 per cent and 8 per cent, respectively.

The quarterly median forecast indicates a GDP growth of 6.5 per cent in Q4FY19.

The FY20 IIP (Index of Industrial Production) median growth has been seen at 4.4 per cent, with a minimum and maximum range of 3.3 per cent and 5.5 per cent, respectively.

According to the report, economists' outlook on inflation has remained moderate. Wholesale inflation rate is projected at 3.1 per cent in FY20, with a minimum and maximum range of 2.1 per cent and 4 per cent, respectively.

The FY20 Consumer Price Index (CPI) or retail inflation has a median forecast of 4 per cent, with a minimum and maximum range of 3.5 per cent and 4.1 per cent, respectively.

Concerns remain on external front with median current account deficit pegged at 2.1 per cent of the GDP and median export growth at 4 per cent in FY20. Imports, on the other hand, are forecast to grow at 3.8 per cent.

Economists were less sanguine about the export outlook and blamed escalation in trade tensions, which is impacting the world economic growth, for clouding the global trade growth outlook.

The US withdrawal of the Generalised System of Preferences (GSP) benefits to India, likely to come into effect in June, has added to India's concerns despite the duty benefits out of this being only $190 million.

The Ficci has advocated measures, such as adequate availability of affordable credit, timely refund of GST, incentives like interest subsidy to merchant exporters and budgetary support for marketing and export-related infrastructure for boosting growth prospects.

Majority of economists believe the US decision to end waiver to countries from Iran sanctions is significant and will affect major oil importing countries, including India.

The Ficci report stressed early recapitalisation of public sector banks. Pointing to lack of jobs as a major concern, it said the government must take measures to improve the employment situation and help in creation of livelihood opportunities.