New Delhi: The second quarter GDP growth may further lower down to 4.2% on low automobile sales, deceleration in air traffic movements, flattening of core sector growth and declining investment in construction and infrastructure, and the growth forecast for FY20 has now come down to 5% from 6.1% earlier, an SBI report said.
State Bank of India (SBI) joins all other global agencies -- the Asian Development Bank, World Bank, OECD, RBI and the International Monetary Fund -- in downgrading India's FY20 growth rates.
"Based on our composite leading indicator that suggests the GDP growth to slow down further from 5.0% in Q1 of FY20 to 4.2% on account of low automobile sales, deceleration in air traffic movements, flattening of core sector growth and declining investment in construction and infrastructure", the bank said in a report.
India's GDP was already at the 6-year lowest of 5% in Q1. "Our 33 high frequency leading indicators reveal an acceleration rate which was 65% in Q1 FY19 declined sharply to 27% in Q2 FY20. Besides that,
Skymet also reported that the country as a whole
received 110% of the long period average (LPA) of 89 cm of rainfall during the four-month-long southwest monsoon period, making it to the above normal category, SBI said.
"Among meteorological divisions, Central India and Southern Peninsula received the maximum rainfall of 129% and 116% of their LPA, respectively. Excess Monsoon rains and the floods caused by them had affected the Kharif crops in many states, including Madhya Pradesh, Maharashtra, Gujarat, Karnataka and Punjab.
"While 40 to 50% soyabean crop has been hit in Madhya Pradesh, which is the biggest producer of the oilseed, 30 to 40% of the groundnut and up to 30% of cotton crops have been affected in Gujarat.