India's economic recovery much slower than expected

The country will still be second largest emerging market

GN Bureau | October 12, 2015



Indian economy is recovering at a much slower-than-expected pace, said global financial services major Bank of America Merrill Lynch today. However, it said India's growth was enough to overtake Brazil and Russia to become the second largest emerging market after China.

"Is recovery happening? Yes, but even more slowly than we expected. At the same time, India's relatively faster growth is allowing it to overtake Brazil and Russia in GDP to emerge as the second largest emerging market after China," BofA-ML said in a note.

The firm today also trimmed its growth forecast for India to 5.5 per cent from 6 per cent for the current fiscal, as per the old GDP series. As per the old series, the base year for calculation of national accounts was 2004-05.

The Central Statistics Office (CSO) has now adopted the new series of National Accounts with 2011-12 as base year and subsequently revised the Gross Domestic Product (GDP) growth rate to 6.9 per cent in 2013-14 from 4.7  per cent and 5.1 per cent in 2012-13 from 4.5 per cent.

The RBI has also lowered its economic growth forecast for the current fiscal to 7.4 per cent from its previous projection of 7.6 per cent.

"We have cut our GDP forecasts to 5.5 per cent from 6 per cent for 2015-16 and to 6.5 per cent from 7 per cent for 2016-17 (in the old GDP series) on poor rains as well as delays in global recovery and domestic lending rate cuts," it added.

The global brokerage firm said that the coming months could see a consumption recovery largely driven by four factors -- softer lending rates, public sector salary hikes after the 7th Pay Commission, household savings on lower oil prices and a possible hike in wheat MSP before the early-2017 Punjab/UP polls.


On RBI rate cut, BofA-ML said, "We expect the RBI to cut another 25 bps in February after it meets its under-6 per cent January 2016 inflation mandate."

Comments

 

Other News

BMC took nearly 48 days in resolving one complaint

The number of civic complaints with BMC has increased from 61,910 in 2015 to 92,329 in 2017, which is 49% in two years. A report titled ‘Civic Issues Registered by Citizens and Deliberations done by Municipal Councillors in Mumbai’ released by Praja Foundation has found some interesting facts a

Who is Atishi Marlena?

Atishi Marlena is among the nine AAP functionaries who were dismissed by the union home ministry asserting that their posts were created without the approval of the centre. Marlena, served as education advisor of the Aam Aadmi Party (AAP)-led government in Delhi. While she was intrumental in improving the

Leadership? Learn it from Jaising, Ambani, Doshi

The Fortune magazine has named three Indians – lawyer Indira Jaising, industrialist Mukesh Ambani and architect Balkrishna V Doshi – among the world’s greatest fifty leaders.

Energy as the new value system for redesigning daily life

Remember Kardashev scale? For the uninitiated, it’s a method of measuring a civilization’s level of technological advancement, based on the amount of energy it is able to use for communication. We will get to its unconventional relevance to the big urban questions at the end, but just keep it a

48 MLAs, MPs have declared cases of crime against women

Out of 1580 MPs and MLAs with criminal cases, 48 (three MPs and 45 MLAs) have declared cases related to crime against women. The Association for Democratic Reforms (ADR) and

A rare peek into the mind of Modi

It’s always lonely at the top. Prime minister Narendra Modi’s marathon townhall event at the Central Hall Westminster, titled ‘Bharat ki Baat, Sab ke Saath’, was nothing but his way of shedding that loneliness, communicating and mingling with people and showing his vulnerable side.

Current Issue

Current Issue

Video

CM Nitish’s convoy attacked in Buxar

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter