Friday, Sep 25, 2020 | Last Update : 06:57 AM IST

185th Day Of Lockdown

Maharashtra128396397321434345 Andhra Pradesh6543855794745558 Tamil Nadu5636915082109076 Karnataka5485574446588331 Uttar Pradesh3742773076115366 Delhi2606232243755123 West Bengal2378692080424606 Odisha196888161044805 Telangana1792461481391070 Bihar174266159700878 Assam165582135141608 Kerala15445898720614 Gujarat1289491093113382 Rajasthan1227201023301352 Haryana118554984101177 Madhya Pradesh115361814752007 Punjab105220814752860 Chhatisgarh9562358833680 Jharkhand7643862945626 Jammu and Kashmir68614480791024 Uttarakhand4440432154501 Goa3055224347360 Puducherry2489519311467 Tripura2378616955245 Himachal Pradesh133869232125 Chandigarh109688342123 Manipur9537736959 Arunachal Pradesh8416607113 Nagaland5730459810 Meghalaya4733252838 Sikkim2447190529 Mizoram158510120
  Business   Economy  28 Nov 2017  DBS Bank lowers India's FY18 GDP growth to 6.6 pc

DBS Bank lowers India's FY18 GDP growth to 6.6 pc

PTI
Published : Nov 28, 2017, 3:45 pm IST
Updated : Nov 28, 2017, 3:45 pm IST

Bank, however, expects that Indian economy will recover in fiscal 2019 and achieve a growth rate of 7.2 per cent.

GDP growth slowed from 7.9 per cent YoY in April- June 2016 (i.e. Q1 FY17) to a three-year low of 5.7 per cent in Q1 FY18.
 GDP growth slowed from 7.9 per cent YoY in April- June 2016 (i.e. Q1 FY17) to a three-year low of 5.7 per cent in Q1 FY18.

Singapore: Singapore's DBS Bank on Tuesday lowered India's GDP growth forecast for current fiscal to 6.6 per cent from the previous 6.8 per cent, citing that businesses were "still adjusting" to the new GST regime and there were "limited room" for fiscal support.

The Bank, however, expects that Indian economy will recover in fiscal 2019 and achieve a growth rate of 7.2 per cent. The Indian government will play a balancing act between reviving growth whilst maintaining its macro-stability credentials in fiscal 2019.

 

The recent rating upgrade from Moody's was a big boost to sentiment and is likely to lower offshore borrowing costs for Indian companies, it said in a country report "India in 2018/19".

But, it (the upgrade) comes at a time when risks to India's macroeconomic environment have risen compared to the past three years, according to DBS.

"With businesses still adjusting to the goods-and- services tax (GST) regime, slow progress in corporate deleveraging, and limited room for fiscal support, we have nudged down our FY18 GDP forecast to 6.6 per cent YoY from 6.8 per cent previously," it said.

Inflation is expected to edge up on higher commodity prices and stronger demand momentum, whilst the current account and fiscal deficits run the risk of re-widening.

 

These will test the economy's resilience against any unexpected event shocks, at a time when global tailwinds (oil and liquidity) look set to reverse, said the bank.

"We expect the economy to recover to 7.2 per cent Year- on-Year (YoY) in FY19, from a likely 6.6 per cent in FY18. Consumption is expected to drive this revival as households benefit from higher wages and allowances, along with benign inflation and wide real rates," it said.

The Goods and Services Tax (GST) tweaks will help lower the tax incidence on consumers. Lead indicators, including auto sales and personal credit growth (for urban spending), as well as non-durables output (rural demand) are expected to improve, the bank observed.

 

It noted that cyclical forces (twin balance-sheet stress and weak trade) and structural changes (expedited formalisation) have hurt India's growth in the past few years. Real GDP growth slowed from 7.9 per cent YoY in April- June 2016 (i.e. Q1 FY17) to a three-year low of 5.7 per cent in Q1 FY18.

However, incoming data has been pointing to some stabilisation in Q2 FY18 on restocking demand and better consumption before losing momentum again into Q3, according to the bank. The Indian Rupee (INR) will no longer be resilient to US interest rate hikes in the coming two years compared to 2016- 17.

"We expect the rupee to depreciate towards 67 and 68 against the USD in 2018 and 2019, respectively," the DBS report said.  

 

Tags: dbs bank, gdp growth, economy, gst
Location: Singapore, , Singapore