INSUBCONTINENT EXCLUSIVE:
expanded at its slowest pace in more than five years in the April-June quarter, driven by weak investment growth and sluggish demand,
according to economists polled by news agency Reuters.That would reinforce concerns seen in the minutes from the central bank's August
meeting, which showed policymakers were worried about weak growth and indicated further rate cuts in the next few months to boost the
slowing economy.The poll median showed the economy was expected to have grown at a year-on-year pace of 5.7 per cent in the June quarter, a
expansion of 5.6 per cent or lower.The GDP data is due to be released at 5:30 pm on Friday.If the forecast is realised, it would be the
weakest start in the first three months of a fiscal year in seven years."The deceleration in growth that commenced in the second quarter of
the fiscal year ending March 2019 is likely to have continued," said Rini Sen, India economist at ANZ."A host of high frequency indicators -
consumption and investment - have continued to weaken
The most prominent ones include auto sales, output of consumer durables, cement and steel production."Domestic passenger vehicle sales in
July dived at the steepest pace in nearly two decades and declined for the ninth straight month in July, largely due to a liquidity crunch
causing huge job cuts in the sector.These measures, in addition to the risk of further escalation of the US and China trade war, are
weighing on demand and business confidence in India.The median response to an extra question in the poll, which was taken August 21-26,
downgrade from 6.8 per cent predicted just last month and well below the RBI's projection of 6.9 per cent.The RBI lowered its outlook for
unconventional cut of 35 basis points earlier this month to 5.40 per cent.But with inflation not expected to rise anytime soon, the central
bank will likely ease its benchmark rate by 25 basis points again to 5.15 per cent at its October meeting, followed by a 15 basis points cut
in the first quarter of 2020, according to a separate Reuters poll.Those cuts, in addition to a suite of recently announced fiscal measures,
could provide some cushion for the economy in coming months.On Friday, Finance Minister Nirmala Sitharaman announced reforms to revive
economic growth, including rolling back recent tax hikes on foreign and domestic equity investors and several measures for industries."We
believe that the measures announced by the finance minister will help to provide a fillip to credit growth, rate transmission and improving
investor sentiment," noted economists at Morgan Stanley."We continue to see a slow recovery in growth, as monetary measures will help but
may not be sufficient to create a V-shaped recovery, especially in the context of slowing global growth."Get Breaking news, live coverage,
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