"A significant decline in the growth number for this quarter is highly likely, but for the fiscal year as a whole the decline may still be relatively moderate," Fitch Asia-Pacific Sovereigns Group Director Thomas Rookmaaker said.
A piece of slightly negative news can cause a serious setback, warns Debashis Basu.
The Centre for Monitoring Indian Economy on Monday revised its projection of the GDP during 2003-04 to 8.2 per cent, much higher than the earlier forecast of 7.4 per cent.
Very often, 'sentiment' drives prices well beyond what is warranted and it is hard to forecast market sentiment, explains Debashis Basu.
The revision will do little to help the Congress party-led ruling alliance, which faces an uphill battle in elections due by May amid allegations of economic mismanagement, corruption scams and high inflation.
The Reserve Bank on Thursday said that the overall stance of its monetary policy for this fiscal would continue to accord a high-priority to price and financial markets stability and well-anchored inflation expectations.
The Nifty Bank index has come off 15 per cent from its peak in February, underperforming the benchmark Nifty which is down 6%.
Defence exports grew 33 per cent in the calendar year 2023 (CY23) to around Rs 21,083 crore while domestic defence orders serviced by listed companies were Rs 48,000 crore. The sector is poised for steady growth. Budgeted domestic capex is likely to hit Rs 3 trillion per annum, and exports could reach $6 billion by FY29.
India, along with Southeast Asian countries such as Indonesia, is expected to sustain growth in the medium-term in Asia region, replacing China as the key growth driver, Morgan Stanley and Nomura said in two separate reports released on Monday. While Morgan Stanley projected a 6.2 per cent gross domestic product (GDP) growth forecast for India in FY24, Nomura estimated the Indian economy to grow at 5.9 per cent in 2023. "Even with a slowing China, we expect GDP growth in Asia to sustainably outperform other emerging markets and the US. India and Southeast Asia are set to be the fastest-growing economies this decade.
As he projected a grim outlook for the economy, RBI Governor said that amidst this encircling gloom, agriculture and allied activities have provided a beacon of hope on the back of an increase of 3.7 per cent in foodgrains production to a new record.
Beside manufacturing, deceleration was also witnessed in sectors like agriculture, construction and electricity, gas and water supply.
India's economic growth had slumped to decade low of 5 per cent in 2012-13.
The rupee depreciated 39 paise to an all-time low of 82.69 against the US dollar in early trade on Monday as elevated crude oil prices and risk-averse sentiment among investors weighed on the local unit. Moreover, a negative trend in domestic equities and firm American currency sapped investor appetite, forex traders said. At the interbank foreign exchange, the rupee opened at 82.68 against the greenback, then slipped further to 82.69, registering a fall of 39 paise over its previous close.
The finance minister said figures for second quarter economic growth are yet to come, but industry has started picking up. The Indian economy grew by 6.1 per cent in the first quarter. On inflation, Mukherjee said the government has taken steps to ensure that the adverse impact of inflationary pressures is reduced by strengthening supply management.
"We forecast 7.3 per cent GDP growth (current financial year). We expect fundamentals to improve next year, propelling a recovery in H2 FY10," Lehman Brothers said in a report. For the first quarter ended June 2008, the economy registered a growth of 7.9 per cent against 9.2 per cent in the same period last year.
Chief Economic Advisor (CEA) V Anantha Nageswaran on Thursday said describing India's recovery as 'K-shaped' was wrong as both rural and urban economies were recovering, albeit at different paces. Speaking to reporters at the Finance Ministry, Nageswaran said the gross domestic product (GDP) growth print for the recent October-December quarter (Q3FY23) will likely be revised upwards. "The notion of using the letter 'K' to denote urban and rural is somewhat wrong because it is almost as if one is growing and one is contracting. "I would say one segment's slope is more positive, and the other one slope is less positive but it is positive," Nageswaran said.
Of the seven surveys presented under Modi govt, predictions of three were quite close to the actual GDP growth rate, one saw the base year change in between, but the last three were way off the mark.
Amid rising geopolitical risks, a vast majority of Indian CEOs have indicated in a survey that they are reducing or planning to reduce operating costs, even as they are more upbeat than their global peers on their country's economic prospects. However, most of the companies do not plan to cut their headcount or salaries, found the annual Global CEO Survey released by consultancy giant PwC here on the first day of the World Economic Forum meeting on Monday. The survey also found that about four in ten CEOs (40 per cent of global and 41 per cent of India respondents) do not expect their companies to be economically viable in 10 years if they continue on their current path.
Forecasting 7.2 per cent GDP growth for the current fiscal, industry chamber CII on Tuesday stressed on sustainable development for alleviating poverty and employment generation in the country.
Most rate-sensitive stocks ended on a negative note, with BSE auto, bankex, finance and realty indices cracking up to 2.10 per cent.
The previous high GDP growth of 8.1 per cent was recorded in April-June quarter of 2016-17.
The economy faces more downside risks now as economic disruptions arising from the second wave are likely to stabilise only from July, warned the Swiss brokerage USB Securities. Last month, the brokerage had cut its GDP forecast by 150 bps to 10 per cent for FY22, which though is much higher than the consensus projections by others with some pegging it at as low as 8 per cent. Though adverse impacts on sequential growth is less severe than in the June 2020 quarter when it plunged by 23.9 per cent, as lockdowns are more targeted and localised and households and businesses have adjusted to the new normal now, still, it is increasingly possible that normalcy returns only by July as against our baseline assumption of June.
Credit rating agency ICRA disputed the official forecast of a lower 4.4 per cent growth in GDP, and said all indications in reality are that the economy was slated to grow by 5.4-5.5 per cent this fiscal.
Those hardest hit by the second wave of the pandemic have been blue-collared workers, doctors and healthcare workers, law and order and municipal personnel, individuals eking out daily livelihood, and small businesses. And there should be more measures taken to alleviate their pain, the Reserve Bank of India (RBI) said on Monday. The report also indicated that the RBI's growth numbers might have to be revisited as the central bank's real GDP growth projection of 26.2 per cent given in the MPC's resolution of April 7 for the first quarter of 2021-22, were "made before the full fury of the resurgence." Nevertheless, the "resurgence of COVID-19 has dented but not debilitated economic activity in the first half of Q1: 2021-22.
Attributing the growth to an upswing in consumption and investment, the World Bank has said India will continue to be the fastest growing major economy in the world.
Top losers in the Sensex pack included IndusInd Bank, Yes Bank, SBI, L&T, Tata Steel, M&M, Bajaj Finance, Vedanta, Tata Motors and RIL, tumbling up to 6.97 per cent.
According to China's National Bureau of Statistics, the GDP expanded 9.5 per cent year-on-year, which is a decline compared to the 9.7 per cent rate achieved in the first quarter.
US's terrible political and economic leadership will ultimately cost the dollar its value. India must act early to avoid being dragged down, suggests R Jagannathan.
"We expect GDP growth to slow from 7.3 per cent year-on-year in July-September 2016 to 6.0 per cent in October-December 2016 and 5.7 per cent in January-March 2017," Nomura said in a research note.
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The RBI said lead indicators point to continuing sluggishness in domestic economic activity in the first quarter of 2014-15.
'If you look at the order books of capital equipment companies or money deployed on the ground, there is forward movement in terms of actual investment by the private sector.'
"The Monetary Policy Committee recognises that there is monetary policy space for future action. However, given the evolving growth-inflation dynamics, the MPC felt it appropriate to take a pause at this juncture," the RBI said in its fifth bi-monthly monetary policy for this fiscal.
Growth in the third quarter (October-December) is expected to be the weakest in years, with spending hit due to unavailability of enough replacement currency.
The wholesale inflation rose to a 13-month high of 1.26 per cent in April fuelled by rising prices of food articles, especially vegetables, amid expectations of RBI holding interest rates in the policy review next month. The wholesale price index (WPI) based inflation has been rising for two months in a row.
Foreign investment firm Credit Suisse First Boston said on Thursday that delayed monsoon is unlikely to have a "significant impact" on India's economic growth pegged at 5.7 per cent in 2004-05.
The Asian Development Bank too had projected Indian's economic growth for current fiscal at 7.4 per cent.
The economy is slated to grow by 6.3 per cent over the financial year 2004-05 and accelerate to 6.8 per cent in the next fiscal, credit rating agency ICRA said on Tuesday.
After falling 10 per cent against the greenback in 2022, the rupee staged a comeback in 2023 as it appreciated, albeit marginally, on the back of strong portfolio inflows, in addition to timely intervention by the Reserve Bank of India. The Indian unit appreciated by 0.16 percent in six months until June 28. The rupee stood in third place in terms of appreciation against the US dollar among the 12 Asian currencies and in 12th place of the 23 emerging-market currencies.
Have the markets already played out their dynamics before the economy has even properly taken off? Are we now destined for a period of mediocre returns despite a strong economy? asks Akash Prakash.
"According to the global financial services major, though CAD at 3.2 per cent of GDP is significantly lower than the 4.8 per cent it registered in fiscal year 2012-13 ", it still remains higher than the 2.4 per cent of GDP that we estimate as the optimal current account deficit".
