India’s GDP expected to expand 6.0% - UOB

Pablo Piovano FXStreet

Barnabas Gan, Economist at UOB Group, assessed the prospects of economic growth in India.

Key Quotes

“India’s GDP growth decelerated for its sixth quarter by just 4.5% on a year-on-year basis in the July to September quarter in 2019, marking its slowest pace since early 2013. This is a stark slowdown from its 9% growth handle just three years ago, and the weakest on record under Prime Minister Narendra Modi’s watch”.

“The low rate of expansion was dragged by a weak manufacturing sector, falling consumer demand, and sustained lacklustre private investments. Importantly, India’s external environment continues to pale as the US-China trade tensions wears on”.

“Given the sustained slowdown in India’s economic growth, we keep our GDP outlook at 6.0% for the current fiscal year with downside risks. This is slightly more bearish compared to RBI’s latest revision for GDP growth to come in at 6.1% y/y (down from its initial expectation of 6.9%). Moreover, RBI had maintained its accommodative stance in its last MPC report and highlighted the need to ease policy with the objective of achieving the ‘medium-term target for CPI inflation of 4% within a band of +/- 2% while supporting economic growth’. As such, in light of a soft growth environment, we continue to expect RBI to reduce rates by another 25bps in its upcoming 5 December MPC meeting.

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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