Wait...
  1. Home >
  2. Export Import News >
  3. Import News >
  4. Rating shock: Fitch cuts India growth forecast to 7.2% >
  5. Rating shock: Fitch cuts India growth forecast to 7.2%

Online Export Import Data Search

Complete Training Video : Click Here

Rating shock: Fitch cuts India growth forecast to 7.2%.


Date: 07-12-2018
Subject: Rating shock: Fitch cuts India growth forecast to 7.2%
Fitch Ratings Thursday slashed India’s GDP growth forecast to 7.2 per cent for current fiscal, from 7.8 per cent projected in September, citing higher financing cost and reduced credit availability. In its Global Economic Outlook released Thursday, Fitch estimated India’s GDP growth to be 7 per cent and 7.1 per cent in financial years 2019-20 and 2020-21 respectively. Indian economy grew 6.7 per cent in 2017-18 fiscal. The 7.2 per cent GDP growth for current fiscal is substantially lower than 7.8 per cent and 7.4 per cent projections made by Fitch in September and June respectively. It is also lower than RBI’s 7.4 per cent growth estimates for this fiscal. “We have lowered our growth forecasts on weaker-than-expected momentum in the data (GDP), higher financing costs and reduced credit availability. We now see GDP growth at 7.2 per cent in the fiscal year ending March 2019 (FY19), followed by 7.0 per cent in FY20 and 7.1 per cent in FY21,” Fitch said.

In September, the rating agency had forecast 2019-20 and 2020-21 GDP growth at 7.3 per cent. Fitch said GDP growth has “softened quite substantially” in July-September quarter of current fiscal growing by 7.1 per cent, as against 8.2 per cent in April-June. “Consumption was the weak spot, stepping down from 8.6 per cent to 7 per cent, though still growing at a healthy rate. Other components of domestic demand fared well, notably investment, which has been steadily strengthening since 2H17. The external sector was again a significant drag on overall GDP amid steadily accelerating imports,” Fitch said. The global rating agency said India’s fiscal policy should continue to support growth in the run-up to elections in early 2019 and forecast Indian rupee to weaken to 75 to a dollar by end of 2019.

The rupee is currently hovering around 71 per dollar mark. “Stepped-up public investment has helped to stem the downward trend in the investment/GDP ratio, boosted by infrastructure spending. There have also been measures to support rural demand,” it added. It said the banking sector is still struggling with a high proportion of non-performing assets, while non-banking financial institutions (NBFIs) are facing tighter access to liquidity following the default of IL&FS, one of the 30 biggest NBFIs in India. NFBIs have accounted for a large share of all lending in recent years and have expanded credit rapidly, it said. “So far, the Reserve Bank of India (RBI) has dismissed calls by the government to provide emergency liquidity and to ease lending restrictions on the maximum volume of lending that state-run banks can provide to NBFIs,” Fitch added. Fitch said it expects inflation to edge up mildly in the coming months, on normalising food prices and higher import prices stemming from the depreciation of rupee. “The widening of the current account deficit amidst tighter global financing conditions should put downward pressure on the currency, and we forecast the INR to weaken to 75 against the dollar by end-2019,” it said.

Fitch, however, retained its global GDP forecasts for 2018 and 2019 at 3.3 per cent this year and 3.1 per cent next year. It also retained China’s growth projections at 6.6 per cent in 2018 and 6.1 per cent in 2019. With regard to crude prices, Fitch expect oil prices to recover somewhat from current levels, with OPEC likely to agree to some production cuts at its early December meeting. “Our 2018 annual average estimate has been raised slightly to USD 72.5 per barrel to reflect year-to-date out-turns but our 2019 assumption is unchanged at USD 65. In the medium term, we have become a little more confident in the ability of OPEC+ (including Opec and non-Opec oil majors) and to help stabilise prices,” Fitch said. The 2020 oil price forecast has been revised upwards to USD 62.5 from USD 57.5 projected in September outlook of Fitch. The price of Indian basket of crude oil fell below USD 60 to a barrel by end November, from USD 85 to a barrel in early October.

Source: financialexpress.com

Get Sample Now

Which service(s) are you interested in?
 Export Data
 Import Data
 Both
 Buyers
 Suppliers
 Both
OR
 Exim Help
+


What is New?

Date: 16-05-2019
Notification No.37/2019 - Customs (N.T.)
Exchange Rates Notification No.37/2019-Custom(NT) dated 16.05.2019

Date: 16-05-2019
Trade Notice No. 15/2015-2020
Claim of MEIS benefits for exports made to countries in the OFAC List such as Iran and for Vostro Payments

Date: 16-05-2019
TRADE NOTICE No. 16/2019-20
Prohibition on direct or indirect import and export from/to DPRK (Democratic People's Republic of Korea) in terms of UNSC resolutions concerning DPRK - Para 2.17 of the Foreign Trade Policy 2015-20

Date: 15-05-2019
Notification No. 36/2019-CUSTOMS (N.T.)
Tariff Notification in respect of Fixation of Tariff Value of Edible Oils, Brass Scrap, Poppy Seeds, Areca Nut, Gold and Silver- Reg

Date: 15-05-2019
Trade Notice No. 14/2015-2020
Three months time window for applying for MEIS for shipping bills with HS Codes which were harmonized and notified under MEIS Appendix 3B, Table 2 after a delay

Date: 15-05-2019
Policy Circular No. 23/2015-20
Non-requirement of submission of Hard copy of application at RAs for issue of Advance Authorisation (AA) & EPCG Authorisation

Date: 15-05-2019
ECA Circular No. 24
Administrative Review of Adjudication Orders passed by subordinate officers - regarding.

Date: 14-05-2019
TRADE NOTICE NO. 13/2019-20
Imports of Maize (feed grade) under the TRQ Scheme for 2019-20.

Date: 14-05-2019
Notification No. 15/2019-Customs
Seeks to further amend notification No. 50/2017-customs dated 30th June 2017 to postpone the implementation of increased customs duty on specified imports originating in USA from 16th May, 2019 to 16th June, 2019.

Date: 14-05-2019
Public Notice No. 8/2015-20
Amendment in the Para 3.01 (b) of the Handbook of Procedures



Exim Guru Copyright © 1999-2019 Exim Guru. All Rights Reserved.
The information presented on the site is believed to be accurate. However, InfodriveIndia takes no legal responsibilities for the validity of the information.
Please read our Terms of Use and Privacy Policy before you use this Export Import Data Directory.

EximGuru.com

C/o Infodrive India
E-2, 3rd Floor, Kalkaji Main Road
New Delhi - 110019, India
Phone : 011 - 40703001