forecast | Business Upturn

India’s GDP growth prediction reduced by 20 basis points to 5.9% by IMF’s latest forecast

News Desk — Tue, 11 Apr 2023 18:21:24 +0000

The International Monetary Fund (IMF) lowered its growth prediction for India’s fiscal year 24 economy by twenty basis points, bringing it down to 5.9 percent, in the Global Economic Outlook survey that it published on Tuesday. This most recent prognosis is lower than the projection made by the Central Bank of India, which was 6.4%. In spite of this, the analysis predicts that India will continue to have the highest economic growth of any country in the globe.

In addition, the IMF forecasts that India’s retail inflation would reach 4.9% in the fiscal year of 2024 and 4.4% in the fiscal year of 2025.

IMF Growth Forecast: 2023

USA🇺🇸: 1.6%
Germany🇩🇪: -0.1%
France🇫🇷: 0.7%
Italy🇮🇹: 0.7%
Spain🇪🇸: 1.5%
Japan🇯🇵: 1.3%
UK🇬🇧: -0.3%
Canada🇨🇦: 1.5%
China🇨🇳: 5.2%
India🇮🇳: 5.9%
Russia🇷🇺: 0.7%
Brazil🇧🇷: 0.9%
Mexico🇲🇽: 1.8%
KSA🇸🇦: 3.1%
Nigeria🇳🇬: 3.2%
RSA🇿🇦: 0.1%https://t.co/lvRdo3zKMV pic.twitter.com/mZOsBfCYS5

— IMF (@IMFNews) April 11, 2023

The International Monetary Fund (IMF) revised its projections for India’s economic growth for the 2024-25 fiscal year, bringing those projections down to 6.3% from 6.8%, which they had forecasted back in January of this year.

Despite the fact that the growth projections have been significantly revised downward, India is still expected to have the highest economic growth of any country in the world.

The International Monetary Fund (IMF) had previously anticipated in its annual report that the global economy would expand by 2.8% this year and 3% in 2024, which was a decrease of 10 basis points for each of its January predictions.

Sowing of Kharif crops to be affected by delayed monsoon

Aayushi Singh — Mon, 12 Jul 2021 07:12:25 +0000

The data from India Meteorological Department showed that the monsoon for the season was 7 percent deficient between June 1 and July 10.

For the first time this year on July 10, the summer-sown crops had been hit by patchy rains in many parts of the country as the southwest monsoon showed a seasonal deficit of more than 5 percent.

It had been by the forecasters that the rain-bearing system should be reactivated soon.

The Agriculture Ministry showed data that mentioned that the total acreage of Kharid crops was at 49 million hectares which were almost 11 percent less than the 55 million hectares which were sown in the previous year.

The monsoon was critical for Asia’s third-largest economy as nearly half of the country’s population depended on it and 60 percent of the country’s net sown area did not have irrigation access. The rains had also replenished more than 100 national important reservoirs, critical for drinking water and irrigation.

The millions of farmers depended on the rains to sow a range of summer crops, and as of July 10, 2021, the area under rice stood at 11 million hectares compared to a normal area of 11.6 million hectares.

The total sown area was 21 percent lower on June 25.

The IMD had forecasted saying that monsoon should start by mid-July. In their latest bulletin, it had said that the monthly rainfall for July 2021 over the country as a whole was most likely to be normal.

As per the sources, the Meteorological subdivisions such as east Madhya Pradesh, Punjab, east Rajasthan, west Rajasthan, parts of Gujarat region, Saurashtra, Kutch, Vidarbha, Madhya Maharashtra, Chhattisgarh, coastal Karnataka, and south interior Karnataka received lower than average precipitation.

Jeet Singh Sandhu, the vice-chancellor of the SKN Agricultural University, Jaipur, said that the July rainfalls were the most critical during the four-month Kharif season and that there would be an impact in sowing in the areas where the irrigation was not available.

Till Friday, the actual cumulative monsoon rainfall that had been received in the country was 223 mm against the normal rainfall received between June 1 and July 9, i.e, 234.5.

The Agriculture Ministry official said that sowing was less than normal in Maharashtra, Gujarat, Rajasthan, Haryana, and Punjab due to the erratic rains or little rain during the monsoon period up-till now.

Goldman Sachs revises India’s GDP forecast to 10.3% for FY21

Sarthak Yadav — Wed, 18 Nov 2020 08:36:08 +0000

Goldman Sachs, the global investment bank has revised India’s GDP forecast for the ongoing financial year and expects economic activity in Asia’s third-largest economy to normalize faster than estimated, provided an effective COVID-19 vaccine is available.

According to a report, GDP growth is estimated at 13% in FY22 compared with 15.7% projected earlier. India’s gross domestic product is to contract 10.3% in 2020-21 against a contraction of 14.8% forecast in September.

Jonathan Sequeira and Andrew Tilton, economists at Goldman Sachs said, “We expect that the broad-based availability of an effective vaccine in India could allow containment policies and mobility to normalise by mid-2022.”

“This should allow a meaningful activity rebound in 2021, particularly in consumer-facing services sectors, where activity remains significantly below pre-covid levels,” they further added.

An effective vaccine in India will be able to provide a meaningful activity rebound in 2021 particularly in consumer-facing services sectors, where activity remains significantly below pre-pandemic levels however the pace of the rebound will be restrained by some economic scarring and a number of factors including a weak labour market, the hit to private sector incomes and balance sheets, tighter credit supply conditions and a limited impetus from fiscal policy.

The Purchasing Managers’ Index (PMI) for manufacturing hit a record 13-year high of 58.9 in October, while services PMI touched 54.1 for that month, marking the first month of post-lockdown growth for the sector and taking the composite index to 58.

The Reserve Bank of India (RBI), projected the economy to contract 9.5% in the current fiscal but expects growth to turn positive during the January-March, while finance minister Nirmala Sitharaman had said FY21 growth would be ‘near zero’.

India’s fiscal deficit is estimated at 8% of the GDP in FY21 and is expected to narrow to 6.5% of the GDP in FY22. The central government’s plus states’ fiscal deficit is estimated to narrow from 11.5% to 9.5% of the GDP in the same duration, the report said.

“This suggests that the total fiscal policy contribution to growth will decline further in FY22,” it further stated.

Inflation, as measured by the Consumer Price Index, is estimated at 6.2% in FY21, and is likely to decline to 4.6% in FY22 as food prices fall on easing supply restrictions, a benign monsoon, and favourable base effect, according to the report. Core inflation could also moderate given low manufacturing capacity utilisation and rupee appreciation.

“We expect RBI to cut policy rates by another 35 bp early next year,” said Goldman Sachs.

A sharp rise in the corporate interest burden and the consequent decline in debt servicing capability, potential tightening in credit supply, low manufacturing capacity utilization and the inventory overhang in residential housing could prove to be a drag on private investment seeing a rebound, Goldman Sachs further added.