India`s GDP growth falls to 5 per cent in April-June 2019

India’s economic growth rate hits 6-year low

India`s 2019-20 Q1 GDP growth slows down to 5%, lowest in 7 years

India's latest GDP growth number, which missed the 5.7% rate estimated by economists by a wide margin, may prompt the Reserve Bank of India (RBI) to further reduce its full-year growth forecast.

Construction sector GVA growth too slowed to 5.7 per cent from 9.6 per cent earlier.

Speaking at the "India Economic Conclave 2019" in Bengaluru, Shaw said no one expected the GDP growth to be this low, and marked out infrastructure as the key area which the Government should focus on.

Prior to announcement of GDP numbers, the government on Friday announced its second of the three-part stimulus, merging 10 public sector banks into four with a view to boost credit to help revive the economy.

The government is taking steps to try to revive growth, and recently got help from the central bank, in the form of a windfall dividend of almost $21 billion.

The government this week approved 100% foreign investment in coal mining and eased rules for sectors including contract manufacturing and single-brand retail.

The government had on August 23 announced a slew of measures to boost economy and lift investor sentiment.

India's auto sector has seen a slump in sales for nine consecutive months till July, while stagnant rural wages have led to a fall in demand for certain manufactured food items.

Global analytical firm CRISIL has cut India's GDP growth forecast for this fiscal by 20 basis points to 6.9 percent citing weak monsoon, slowing global growth, and sluggish high-frequency data for the first quarter. Private consumption expenditure further decelerated to an 18-quarter low of 3.1% in the June quarter, while investment demand picked up slightly at 4% from 3.6% in the preceding three months.

The central bank has shown willingness to join hands with the government to try to revive consumer demand and investments because inflation remains below its 4% medium term target for a year.

New Delhi is taking steps to try to revive growth, and recently got help from the central bank, in the form of a windfall dividend of almost $21 billion.

"Ind-Ra believes both structural and cyclical issues are plaguing Indian economy and in order to bring the economy back to a respectable growth path both short-term and long term measures are required", he noted.

The RBI marginally lowered GDP growth estimates for FY20 to 6.9 per cent from 7 per cent projected earlier in its June policy statement.

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