• Deccan Chronicle
  • Andhra Bhoomi
  • Asian Age
  • ePaper
  •  Auto Refresh
Home

ePaper
Last Updated:03:13 AM IST | Tuesday, Jan 31, 2023
  • Home
  • Politics, Plan And Policy
  • Markets
  • Companies
  • Economy
  • In Other News
  • Autos
  • Just In
Menu
  • Home
  • Politics, Plan And Policy
  • Markets
  • Companies
  • Economy
  • In Other News
  • Autos
  • Just In
Home > In Other News > India may have entered quasi-recession: Analyst
In Other News
India may have entered quasi-recession: Analyst
Ronojoy Mazumdar
By  
  , Published : Sep 4, 2019, 2:13 am IST | Updated : Sep 4, 2019, 2:13 am IST

Growth slips below long-term trend of 6.6 per cent for 2 qtrs.

Room to do that is limited. The government is targeting a budget deficit of 3.3 per cent of GDP in the financial year through March 2020, but total public sector borrowing, which includes those by regional governments and state-owned companies, is estimated at more than 8 per cent of GDP.
Room to do that is limited. The government is targeting a budget deficit of 3.3 per cent of GDP in the financial year through March 2020, but total public sector borrowing, which includes those by regional governments and state-owned companies, is estimated at more than 8 per cent of GDP.

India's longest growth slump since 2012 is heightening concern that it may be tough for policy makers to reverse the slowdown.

"Growth has now slipped below the long term trend of 6.6 per cent for two consecutive quarters, which implies that India is effectively in a quasi-recession," Teresa John, an Economist at Nirmal Bang Equities Pvt. in Mumbai, said in a report published on Tuesday. Early indicators suggest, "growth remains elusive," she added.

While the standard macroeconomic definition of a recession is two consecutive quarters of shrinking GDP, a significant decline in economic activity spread across months is another often-used description. In India, which offers only year-on-year calculations of output, automobile sales have plunged the most in two decades and the Chairman of Hindustan Unilever warned that the consumer goods his company makes are "recession-resistant, but not recession-proof."

Official data on Friday showed that gross domestic product grew 5 per cent in April-June from a year earlier, below the weakest estimate of 39 economists polled by Bloomberg and the slowest pace in six years. The five straight quarters of slowing growth mark the longest slump since 2012. Under the hood, the numbers offer more cause for concern on whether output— once adjusted for inflation —will increase fast enough to ensure borrowers cover their interest payments.

A Bloomberg gauge of high-frequency indicators suggests that economic activity continued to weaken in July, with investment and consumption both falling. Economists at Nirmal Bang expect GDP growth to bottom out in the quarter ending September, but believe that "a counter-cyclical government spending boost is required."

Room to do that is limited. The government is targeting a budget deficit of 3.3 per cent of GDP in the financial year through March 2020, but total public sector borrowing, which includes those by regional governments and state-owned companies, is estimated at more than 8 per cent of GDP.

Monetary policy may have to bear the burden. Goldman Sachs Group has joined other lenders in predicting deeper interest-rate cuts by the central bank to revive the pace of expansion. Elsewhere, Barclays forecast an additional 65-basis-point decrease by the end of this year and Kotak Mahindra Bank estimated a 75-point reduction will come from the RBI.

end-of
Tags: 
gdp, hindustan unilever, public sector, kotak mahindra bank, rbi
Latest From In Other News
Kaleshwaram Irrigation Project. Picture credits : ANI

NGT says environmental clearance for Kaleshwaram violates law

Internet and Mobile Association of India too had sought clarification on the issue. (Photo: PTI)

DPIIT to soon issue clarification on 26 pc FDI in digital media sector

In financial year 2018-19 the proportion of gross non-performing assets (NPAs) to total loans decreased to 9.1 per cent compared to 11.2 per cent in 2017-18.

RBI sees corporate governance 'fault lines' at some lenders

Most Popular

Mukesh Ambani 9th richest on Forbes' real-time billionaires list
Top credit card myths harmful for your financial well-being
Microsoft CEO Satya Nadella tops Fortune's Businessperson of the Year 2019
Employment growth slowed down in last two years: report
GST structure: key challenges and its solutions

Editor's Picks

Income tax e-filers drop by over 6.6 lakh in FY19: Official data
Swiping on your smartphone reveals a lot about you to your social media company
  • Read Financial Chronicle as it appears in print.
  • Subscribe, and get it delivered in the inbox everyday.
  • Politics, Plan And Policy
  • Markets
  • Companies
  • Economy
  • In Other News
  • Autos
  • Just In
  • Home
  • About Us
  • Contact Us
  • Terms of Service
  • Privacy Guidelines
  • Copyright © 2019 Financial Chronicle, All rights reserved
Developed & Maintained By Daksham