Weaker than expected outlook! IMF explains base modules of India's recent lowered economic growth

Mumbai, September 13: In the backdrop of corporate and environmental regulatory uncertainty lingering weakness in some non-bank financial companies, the International Monetary Fund on Friday claimed India's economic growth to be much weaker than the earlier estimations.

 

 

"Again, we will have a fresh set of numbers coming up, but the recent economic growth in India is much weaker than expected, mainly due to corporate and environmental regulatory uncertainty and lingering weakness in some non-bank financial companies and risks to the outlook are tilted to the downside, as we like to say," IMF spokesman Gerry Rice said while addressing a forum yesterday.

 

The economic growth slowed to a seven year low to 5 per cent in April to June quarter from 8 per cent a year ago. With this the IMF has also moved up to cut its projection for India's economic growth by 0.3 percentage points to 7 per cent for the fiscal year 2019-20 owing to the weaker-than-expected outlook for the domestic demand.

 

"The growth is expected to rise to 7.2 per cent points in FY21, down by the projected growth rate of 7.5 in the earlier report. The slowdown was largely due to a sharp dip in the manufacturing sector and agriculture output", said the Ministry of Statistics and Programme Implementation in a statement.

 

The previous low was recorded at 4.9 per cent in April to June 2012-13 where the consumer demand and private investment had weakened amid global trade frictions and dampening business sentiment, replicating the same in FY19.