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GDP to grow at 6 per cent in Apr-June, more rate cuts in 2019: FICCI
India’s economy will grow at a median rate of 6 pc during the first quarter of the current financial year ended June 30, according to a FICCI report.
The country’s economy grew at 8.2 pc in April-June 2018-19. The growth numbers for the first quarter are expected to be released by the Central Statistics Office next week. “The recently released unemployment numbers by NSSO reaffirm the grim situation with regard to employment in the country,” said Ficci Economic Outlook Survey.
It pegged the annual median GDP growth forecast for 2019-20 at 6.9 pc, with a minimum and maximum estimate of 6.7 pc and 7.2 pc, respectively. The median is the middle number in a sorted, ascending or descending list of numbers which can be more descriptive of a data set than the average.
A majority of the participating economists in the survey suggested the RBI will continue its accommodative stance, with a further cut in the repo rate in the remaining part of 2019-20.
They felt that the prevailing real interest rates were high. They also signalled that tardy deposit growth is haunting the banks as it is limiting their ability to lend and is preventing adequate transmission.
The participants identified four key areas of improvement that would help create more jobs: cost of doing business; regulatory reforms; labour reforms and announcement of sector specific special packages.
They observed that slower global growth will impact India’s growth prospects going forward. In fact, economists unanimously indicated that India’s potential growth rate would be between 7-7.5 pc, which is lower than the 8 pc plus potential growth rate estimated until a few years back, Ficci stated.
However, a majority of participants felt that potential GDP growth would settle at 7.5 pc. The participants were sceptical and divided about replicating the previous high growth performance of over 8 pc and sustaining it at that level, Ficci stated.