INSUBCONTINENT EXCLUSIVE:
India's gross domestic product (GDP) forecast for 2019-20 to 6.1 per cent for the second time in two months.Ind-Ra had earlier revised its
GDP growth estimate to 6.7 per cent from its earlier forecast of 7.3 per cent in August.The cut in forecast follows the Central Statistical
Organisation (CSO) recent estimate of first quarter (April-June) growth at 5 per cent, which came in lower than India Ratings' estimate of
5.7 per cent."Although India Ratings had cited a slowdown in both urban and rural consumption demand growth as one of the key reasons for
the downward revision of GDP in its August 2019 forecast, CSO's first quarter estimate shows that the slowdown has been much sharper than
expectation," the ratings agency said in a report.Ind-Ra expects the first half GDP growth to be 5.2 per cent, and recover to 6.9 per cent
in the second half of the current fiscal, mainly on account of the base effect."The GDP growth in first half is likely to be 5.2 per cent
India Ratings expects it to recover to 6.9 per cent in the second half, mainly on account of the base effect," it said.The slowdown in
consumption demand is reflected in the Reserve Bank of India's (RBI) Consumer Confidence Index as well, that declined to 89.4 in September
in the first quarter, banking credit to commercial sector turning negative at Rs 1,287 billion in the first half and non-banking credit to
commercial sector falling to Rs 2,197 billion in the same half of the current fiscal.Private consumption fell to 3.1 per cent in the first
quarter, from 7.2 per cent in the previous one and 7.3 per cent in the same quarter a year ago.The report highlighted that demand the bigger
challenge facing the economy owing to a collapse in consumption demand, while private investment is not forthcoming.The 2019-20 fiscal
increased transfer from the RBI after the acceptance of the Bimal Jalan Committee report on its Economic Capital Framework will provide some
fiscal deficit could increase to 3.6 per cent of GDP in 2019-20.Get Breaking news, live coverage, and Latest News from India and around the
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