Mumbai: The GDP growth will stay flat at 4.5% in the October-December 2019, economists at SBI said, two days ahead of the release of official data.
They also said that India faces the risk of getting impacted by coronavirus epidemic economically because of its high reliance on Chinese imports for various goods.
The GDP growth is set to slip to a decadal low of 5% in 2019-20, driven majorly by a fall in domestic consumption and sluggish world markets that have impacted Indian exports.
The downward spiral in growth momentum has resulted in a slew of initiatives from the policymaking side, including a cumulative rate cut of 1.35 percentage point by the Reserve Bank in 2019, and a sharp cut in direct taxes for corporates by the government.
The SBI economists revised up their FY2019-20 growth estimate to 4.7% from the earlier estimate of 4.6% because of the base effect triggered by a downward revision in the FY2018-19 growth number by the government.
The "steep" downward revision by the government for the FY2018-19 growth number indicates that the slowdown had set-in since April 2018 onward, the SBI economists said.
On the third quarter estimate, the economists said its composite leading indicator, which analyses inputs from 33 various indicators, suggests that the growth will be flat as the preceding quarter's 4.5% growth.
Meanwhile, on the coronavirus scare, it said, "the economic impact is expected to accrue from supply chain risk which may link up with exports as in pharmaceutical sectors".
Direct exports of commodities like cotton, diamonds to Hong Kong, and import of auto parts and certain items critical to solar projects will be the areas of impact, it said.
They also noted that poultry sales have also seen some impact although the virus is not of avian origin.
‘No real recovery, GDP growth seen at 4.6%’
New Delhi: India's GDP growth is expected to have risen marginally in Oct-Dec after falling for six consecutive quarters.
Growth is likely to have picked up to 4.6% in the third quarter of the current financial year from a six-and-a-half-year low of 4.5% in Jul-Sep due to improvement in agricultural activity and the statistical effect of a low base, according to the median of estimates of a Cogencis poll of 25 economists.
The National Statistical Office will release GDP data for Oct-Dec and the second advance estimate for 2019-20 (Apr-Mar) at 1730 IST on Friday. The first advance estimate released in January pegged GDP growth at 5.0% for the full year.
While the median of economists' estimates suggested an increase in activity in Oct-Dec, opinion was divided, with 40% of those polled saying growth either slowed down further or remained unchanged from the previous quarter.
