India Economic Outlook
February 25, 2020Economic growth likely accelerated in the third quarter of FY 2019, which ran from October to December, after slowing to a six-and-a-half-year low in the second quarter. Business confidence regarding both current and future operating conditions improved in Q3. Moreover, consumers grew more confident about future economic conditions in the same quarter, although confidence about current conditions waned. Nevertheless, economic growth was likely modest in Q3, as industrial production dropped slightly faster than in Q2, bank lending growth slowed and the private-sector PMI reading was broadly unchanged. Meanwhile, in politics, the government unveiled its FY 2020 budget on 1 February, which projects a small narrowing of the estimated fiscal deficit in FY 2019. The budget will likely have a positive but minimal effect on growth.
India Economic GrowthThe economy should grow at a faster pace in FY 2020, which starts in April, due to accommodative fiscal and monetary policy. However, weaker-than-expected growth in China due to the coronavirus outbreak is a key short-term risk for exports, while high levels of bad debt in India’s banking sector could constrain lending and, thus, consumption and fixed investment growth. Our panelists project GDP growth of 5.9% in FY 2020, which is down 0.1 percentage points from last month’s forecast, and 6.4% in FY 2021.
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|Bond Yield||6.50||-0.04 %||Jan 01|
|Exchange Rate||71.23||-0.09 %||Jan 01|
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India Economic News
March 27, 2020
Following an emergency monetary policy meeting ending on 27 March, the Reserve Bank of India (RBI) cut all interest rates to buffer the economy in the face of disruption caused by the coronavirus pandemic and related containment measures.
March 16, 2020
Consumer prices dropped 0.73% in February compared to the previous month, after falling 0.13% in January.
March 13, 2020
Merchandise exports increased 2.9% in February from the same month a year earlier, contrasting the 1.7% decrease in January and amounting to a total value of USD 27.7 billion.
March 12, 2020
Industrial production increased 2.0% in January compared to the same month a year earlier, up from the revised 0.1% increase in December (previously reported: -0.3% year-on-year). Industrial output rose in January primarily due to a rebound in manufacturing production, which fell in December.
March 4, 2020
The composite Purchasing Managers’ Index (PMI) produced by IHS Markit climbed to 57.6 in February from 56.3 in January, representing the highest reading in eight years.