World Economic outlook - India economic growth outlook 2013-2014 : India's economic growth hit a three-year-low in the quarter ending June 30, 2012, and a number of financial institutions cut their economic growth forecast for the country in the last quarter.
India's industrial output grew 0.1 percent in July against the analysts' expectation of a 0.5 percent growth compared to that in the same period a year ago, data released Wednesday by the Central Statistics Office of the Ministry of Statistics and Program Implementation showed.
Few economists expect growth to start recovering in the second half of the fiscal itself. “Growth appears to be bottoming out and we estimate it to be a tad better in second half as compared to the first-half. The recent policy activism from the government and a favourable base strengthen this view
HSBC has cut its India GDP forecast for the fiscal 2013 to 5.7 percent from the previous forecast of 6.2 percent, citing "the lack of reform traction" and a more "challenging" global economic state of affairs.
In a note released Thursday, the financial services company downgraded the country's GDP growth forecast for the fiscal year 2014 to 6.9 percent from 7.4 percent, Reuters reported.
The growth in the economy is finally bottoming out and there are expectations that improvement is in store in 2013. “We see growth picking up gradually to 6.5% in 2013 and further to 7.2% in 2014,” said Tushar Poddar, managing director and chief India economist of Goldman Sachs on Wednesday. According to Poddar India's Gross Domestic Product (GDP) will accelerate from 5.4% in 2012 and shall remain high through 2015-16.
According to Poddar there are three factors which are set to drive this view. “A decline in oil prices in real terms over the next few years, a more favourable external demand outlook and domestic structural reforms which can ease some supply-side constraints,” said Poddar.
However, Credit Suisse cut its FY13 growth estimate for the country by a notch to 5.9% attributing it to delay by the Reserve Bank of India (RBI) in cutting rates to prop up growth. The international brokerage also lowered its FY14 growth forecast to 6.9% from the earlier 7.2%. Credit Suisse expects the RBI to cut rates by 50 basis points only in January and not in the upcoming mid-quarter policy review on December 18. The central bank has been holding on to its high rates despite concerns over growth, citing inflation concerns.
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