Analysts at Australia and New Zealand Banking Group (ANZ) expect India’s Q2 FY20 (July-September quarter) GDP growth to have slowed further to 4.6% y/y from 5% in the previous quarter.
Key Quotes:
“Coming against favourable base effects, it will mark the slowest pace of growth since March 2013.”
“We are also downgrading our FY20 (ending March 2020) growth to 5.1%, from 5.8% previously.”
“We are cautious on a material improvement in the growth outlook in H2 FY20 as high-frequency indicators remain sluggish. We estimate the output gap to have widened to 0.8% of GDP in Q2 FY20 from 0.4% previously.”
“We, therefore, maintain our call for the Reserve Bank of India (RBI) to deliver another 50bps of cumulative cuts in the remainder of this fiscal year. A 25bp rate cut at the next policy review on 5 December appears imminent.”
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