Ratings agency ICRA expects India’s growth rate to further slowdown to 4.7 per cent in second quarter of FY2020, due to weak industrial output. Accordingly, the ratings agency expects a further deterioration in the growth rate of India’s GDP and the gross value added (GVA) at basic prices in year-on-year terms to 4.7 per cent and 4.5 per cent, respectively, in Q2 FY2020, from 5 per cent and 4.9 per cent, respectively, in Q1 FY2020.

However, sectors such as agriculture and services may be able to “maintain the growth rate recorded in Q1 FY2020”.

“With subdued domestic demand, investment activity, and non-oil merchandise exports weighing upon volume expansion, manufacturing growth is expected to decelerate further from the marginal 0.6 per cent in Q1 FY2020,” said ICRA’s Principal Economist Aditi Nayar.

“To some extent, lower raw material costs would bolster earnings, and may prevent manufacturing GVA from slipping into a YoY contraction in Q2 FY2020.”

A sharp fall in import of petroleum products reduced India’s October merchandise trade deficit to $11.01 billion from $18 billion reported for the corresponding period of 2018.

Similarly, global slowdown amidst weak domestic demand dipped India’s merchandise exports on a year-on-year basis. As per the data furnished by the Ministry of Commerce & Industry, October exports were marginally down to $26.38 billion from $26.67 billion reported for the corresponding period of the previous year.

Agencies