Rating agency- Fitch ratings on Friday slashed India’s projected growth rate to 6.8% from the previous 7% for the Fiscal year 2019-20, citing weaker than expected momentum of the economy in current fiscal.
“While we have cut our growth forecasts for the next fiscal year (FY20, ending in March 2020) on weaker-than-expected momentum, we still see Indian GDP growth to hold up reasonably well, at 6.8%, followed by 7.1% in FY21,” rating agency said in its Global Economic Outlook report.
Earlier in December, Finch slashed India’s FY19 GDP growth forecast to 7.2% from 7.8%.
Along with this, it has also cut the growth forecast for the next two fiscal year to 7% from 7.3% and 7.1 per cent from 7.3%, respectively.
The report also commented on the change in policy stance by RBI, saying that the central bank has advocated for a more dovish policy stance, by keeping keeping the interest rates low through rate cut in February this year. RBI in its last MPC meeting slashed the key lending rate or repo-rate by 25 bps.
“We have changed our rate outlook and we now expect another 25 bps cut in 2019, amid protracted below target inflation and easier global monetary conditions than previously envisaged,” it said.
Fitch also slashed its global GDP forecasts for 2018 and 2019 at 3.2% in 2018 and 2.8% in 2019 from 3.3% and 3.1%, respectively, projected earlier.