A blow to the economic front: Fitch lowered GDP growth estimates by 5.5 percent

Mumbai, Ta. October 24, 2019, Thursday

While BJP is back on the political front in the Assembly elections on Thursday, another blow to the government came on the economic front. The rating agency Fitch has projected GDP growth for the current fiscal 2019-20 from just 6.6 percent to just 5.5 percent, the lowest level of the last six years. Fitch said growth rates could reach a six-year low due to a drastic decline in the debt distribution of banks.

Fitch previously projected GDP growth for the current fiscal year to 6.6 percent in June. Thus, the figures released on Thursday indicate a significant slowdown in economic growth.

Fitch said that recent measures such as corporate tax cuts are being taken by the government, the impact of this will be seen gradually in the economy. It is worth mentioning that Fitch's estimate is lower than the Reserve Bank's estimate.

The RBI said in October that the GDP growth for the current financial year could be 6.1 percent. Fitch said the benefits of the government's economic reform measures could be seen in the next financial year 2020-21. At that time, GDP growth could rise from 5.5 percent to 6.2 percent. GDP growth is likely to grow by 6.7 percent in its next year, ie 2021-22.

It is worth mentioning that the Indian economy has been sluggish for the fifth consecutive quarter in April-June while GDP growth has been only 5%. This year has seen the lowest growth since 2013. The GDP growth was 8% in the same period a year ago. In his report, Fitch said, "The economy is seeing widespread decline.

Both local costs and export demand are slowing down. Due to the crisis of non-banking finance companies, the debt distribution system in the Indian economy has shrunk considerably. ' Earlier in October, the Moody's Investors Service also reduced GDP growth estimates to 5.8 percent in 2019-20. In the first place, Moody's estimated GDP growth of 6.2 percent.

In September, the rating agency Crisil claimed that the economic downturn in India was wider and darker than expected. At that time, Crisil also lowered its GDP growth estimates. According to Crisil, India's GDP growth is projected to be 6.3 percent in 2019-20.

Earlier, Crisil had projected GDP growth at 6.9 per cent. According to Crisil, production activities have stabilized and personal consumption has declined significantly. As a result, GDP growth estimates dropped, Fitch said.