New Delhi: India's GDP growth may slide to a series-low of 4.0% in Jan-Mar, according to economists from Nomura.
This would take the full-year growth number to 4.9%, 10 basis points below the National Statistical Office's second advance estimate of 5.0%.
For 2020, Nomura has cut its forecast by 70 bps to 4.7%, as per its baseline scenario.
The cut in the forecast comes after data released last week showed GDP growth slowed down to 4.7% in Oct-Dec from 5.1% in Jul-Sep. Further, the spread of coronavirus has sparked fears of a further hit to economic activity, with the US Federal Reserve slashing the federal funds rate target range by 50 bps on Tuesday in a surprise move.
In a "bad" scenario, which would be if the spread of coronavirus is not checked quickly, Nomura's expects the Indian economy to grow 4.5% in 2020, while in a "severe" case, growth this calendar year could slow down to 3.7%. The economy grew 5.3% in 2019.
However, Nomura does not see much of a risk to the Indian economy from coronavirus.
"Based on our analysis, India is the least vulnerable economy to COVID-19 in Asia ex-Japan. It is not a part of the China-centred global value chains, it is less dependent on China for visitor arrivals and China accounts for only 5.3% of its total exports," Nomura's Sonal Varma and Aurodeep Nandi said in a note.
However, domestic activity could take a hit from any disruptions to production of goods in China which are imported into India as primary and intermediate goods.
"Over 60% of India's imports from China are composed of electrical machinery and equipment, nuclear reactors and boilers and organic chemicals, with plastic articles and fertilisers comprising an additional 7%.
