You are here: Home » Finance » Features » Banks
Business Standard

GDP growth to stay flat at 4.5% in October-December, say SBI economists

They also said that India faces the risk of getting impacted by coronavirus epidemic economically because of its high reliance on Chinese imports for various goods

Narendra Modi123 | water wastage | Nirmala Sitharaman

A K Bhattacharya 

New Innovation

The GDP growth will stay flat at 4.5 per cent in the October-December 2019, economists at SBI said on Wednesday, two days ahead of the release of official data.

They also said that India faces the risk of getting impacted by coronavirus epidemic economically because of its high reliance on Chinese imports for various goods.testing.. we are here....

The GDP growth is set to slip to a decadal low of 5 per cent in 2019-20, driven majorly by a fall in domestic consumption and sluggish world markets that have impacted Indian exports.

The downward spiral in growth momentum has resulted in a slew of initiatives from the policymaking side, including a cumulative rate cut of 1.35 percentage point by the Reserve Bank in 2019, and a sharp cut in direct taxes for corporates by the government.

The SBI economists revised up their FY2019-20 growth estimate to 4.7 per cent from the earlier estimate of 4.6 per cent because of the base effect triggered by a downward revision in the FY2018-19 growth number by the government.

The "steep" downward revision by the government for the FY2018-19 growth number indicates that the slowdown had set-in since April 2018 onward, the SBI economists said.

On the third quarter estimate, the economists said its composite leading indicator, which analyses inputs from 33 various indicators, suggests that the growth will be flat as the preceding quarter's 4.5 per cent growth.

Meanwhile, on the coronavirus scare, it said, "the economic impact is expected to accrue from supply chain risk which may link up with exports as in pharmaceutical sectors".

Direct exports of commodities like cotton, diamonds to Hong Kong, and import of auto parts and certain items critical to solar projects will be the areas of impact, it said.

They also noted that poultry sales have also seen some impact although the virus is not of avian origin.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Wed, February 26 2020. 19:51 IST