GDP growth seen weaker at 5.7% for FY 2020/21 – Rabobank
Fundamental Forex Analysis

GDP growth seen weaker at 5.7% for FY 2020/21 – Rabobank

The Rabobank Research Team is out with its special report on India’s economic growth outlook, suggesting a weaker GDP growth rate for the next fiscal year (FY) 2020/21.

Key Quotes:

“We forecast economic growth in India to be 5.1% for fiscal year 2019/20 and 5.7% for 2020/21.

The relatively weak print for 2020/21 is related to weaker global growth due to recessionary risks in the US (later in 2020). It is unlikely that India will be resistant to these developments but their impact will probably be lower than in many other emerging economies, such as Mexico, Vietnam and the Philippines.

Ongoing structural issues are expected to weigh on India’s medium- and longer-term growth potential.

The recent growth slowdown could result in some fiscal slippage by the government. We think the central government’s fiscal deficit will end up at -3.7% of GDP for fiscal FY2019/20, a breach of the fiscal deficit target of -3.3%.

Given the weak fiscal metrics, we do not anticipate additional major stimulus programs in the Union Budget on 1 February.”

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