Mumbai: Ratings agency ICRA expects India's growth rate to further slowdown to 4.7% in Q2 FY2020, due to weak industrial output.
Accordingly, the ratings agency expects a further deterioration in the growth rate of India's GDP and the gross value added (GVA) at basic prices in year-on-year terms to 4.7% and 4.5%, respectively, in Q2 FY2020, from 5% and 4.9%, respectively, in Q1 FY2020. However, sectors such as agriculture and services may be able to "maintain the growth rate recorded in Q1 FY2020".
"With subdued domestic demand, investment activity, and non-oil merchandise exports weighing upon volume expansion, manufacturing growth is expected to decelerate further from the marginal 0.6% in Q1 FY2020," said ICRA's Principal Economist Aditi Nayar.
"To some extent, lower raw material costs would bolster earnings, and may prevent manufacturing GVA from slipping into a YoY contraction in Q2 FY2020."
In other news, the OECD trimmed Thursday its 2020 global economic growth forecast and said it did not see a strong rebound in 2021 owing to risks stemming from trade tensions.
The Paris-based Organisation for Economic Co-operation and Development estimates that business activity around the world will expand by 2.9% next year, a decline of 0.1 percentage points from a previous forecast issued in September.
In 2021, the OECD, which groups the world's wealthiest nations, sees global economic growth edging back up to 3.0%, according to its November 2019 Economic Outlook.