Weak Investment and negative exports further deepen India's economic slowdown.

India's GDP growth further slowed down to 4.5% YoY in July-September quarter of Fiscal Year 2020. The decline in GDP for this quarter was primarily led by weak investment and contraction in export growth. At this backdrop, with growth in eight core industries contracting by 5.8% YoY for the third consecutive month in October and credit supply and domestic demand remaining lackluster, we believe the recovery in GDP is unlikely in October-December 2019. (November 29, 2019)

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Latest December 12, 2019

Consumer Price Index (CPI)

November CPI at 3-year high driven by surge in food prices; Core CPI continues to remain low.

Indias' Consumer Price Index (CPI) for November rises to almost a three year high at 5.54% YoY driven by increasing food prices. On the other hand, the prices of the other components in the CPI basket either remained constant or increased only marginally. Thus, the pace of growth in core CPI continues to remain low.

The prices of vegetables, which constitute about 13 percent of weightage in the food basket i...

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Latest December 12, 2019

Industrial Production

Industrial output continues to contract, indicating no signs of policy measures transmission.

The contraction in industrial production continued into the third consecutive month in October. The industrial production output fell by 3.8% YoY in October, driven by a broad-based contraction in its components. It indicates that the industries are yet to recover from the effects of the slowdown even after a big announcement of the corporate tax cut by the government in September. However, the slowdown was at a moderated pace when compared to...

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RBI raises its' inflation projection keeping the policy rate unchanged.

The Reserve Bank of India (RBI) kept its policy rates unchanged with repo rate at 5.15% during its fifth-bi monthly policy meet for the fiscal year 2020 (fiscal year 2020 represents the duration between April 2019- March 2020). Consequently, the reverse repo rate was unchanged at 4.90% while the marginal standing facility (MSF) rate and the bank rate were unaltered and fixed at 5.4%.

The RBI has already cut ...

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December round of Forecasters survey expects improvement in growth and inflation to reach 4% by Q2: FY21.

The 61st round of Professional Forecasters (PF) survey highlights the maximum probability for real GDP growth will likely be in the range of 5-5.4% year-on-year (YoY) in fiscal year 2020 (Apr'19-March'20) and it further expects growth to be in the range 6-6.4% YoY in FY21. The growth-pickup is expected on the back of upticks in industrial and services sector activity.

On the inflation front, the PF ex...

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Weak Investment and negative exports further deepen India's economic slowdown.

India's GDP growth further slowed down to 4.5% YoY in July-September quarter of Fiscal Year 2020 (FY2020 represents the period April 2019-March 2020), witnessing the weakest growth since January-March FY2014. When seasonally adjusted, we notice that the real GDP growth for July-September marginally grew to 1.1% QoQ as compared to 0.9% QoQ in the previous quarter, confirming the slow pace of growth in the economy. The decline in GDP for this qu...

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