GDP HIGHLIGHTS: First estimate shows GDP growth rate to slow down to 5% in FY20

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Updated:Jan 07, 2020 6:55:18 pm

GDP HIGHLIGHTS: Amid the ongoing slowdown, the first advance estimates released by the government on Tuesday showed GDP growth rate to slow down to 5 per cent.

GDP HIGHLIGHTS: The RBI cut India’s economic growth estimate down to 5 per cent for FY20.

GDP HIGHLIGHTS: Amid the ongoing slowdown, the first advance estimates released by the government on Tuesday showed GDP growth rate to slow down to 5 per cent. The first advance estimate of FY20 GVA growth was recorded at 4.9 per cent, CSO data also showed. According to the median of a poll of 20 economists by news agency Cogencis, the GDP growth was seen at 5 per cent. India’s growth projects have already been cut by the Reserve Bank of India (RBI) recently. The RBI cut India’s economic growth estimate down to 5 per cent for FY20. Even the global ratings agency Moody’s slashed the economic growth forecast to 5.6 per cent for 2019. Meanwhile, after rallying 553.51 points during the session, the 30-share BSE index ended 192.84 points, or 0.47 per cent, higher at 40,869.47. Similarly, the broader Nifty rose 59.90 points, or 0.50 per cent, to finish at 12,052.95. “Recoveries are likely to be fragile and index is likely to face resistance at higher levels. Nifty is likely to test the support zone of 11,800 zone on the downside. Near term, traders should have a sell on rise approach for the nifty. Uptrend has been fractured in the near term. 12,100 is likely to remain as resistance zone on a closing basis,” Amit Shah, Technical Research Analyst, Indiabulls Ventures said.

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Highlights

    18:38 (IST)07 Jan 2020
    For FY2020 as a whole, we expect GVA and GDP growth to print at 5.1% and 5.3%, Aditi Nayar says

    The advance estimates for the full year FY 2020 have been based on data available for a period of 6-9 months for different sectors. In our view, the pickup displayed by various lead indicators in November-December 2019 is encouraging, and portends a modest improvement in economic growth in H2 FY2020. Moreover, the YoY rise in rabi sowing amid healthy groundwater and reservoir levels, bodes well for agricultural growth and rural sentiment, particularly in the ongoing quarter. However, the momentum of spending by the Central Government dipped in October-November 2019, and we are apprehensive that revenue concerns may necessitate an expenditure squeeze by the Central and state governments in the ongoing quarter, which has emerged as a key risk to the pace of economic growth. For FY2020 as a whole, we expect GVA and GDP growth to print at 5.1% and 5.3%, respectively, modestly higher than the advance estimates of 4.9% and 5.0%.,' Aditi Nayar, Principal Economist, ICRA said.

    18:36 (IST)07 Jan 2020
    Estimates of final expenditure of GDP

    Along with the First Advance Estimates of GVA at Basic Prices by economic activity, the First Advance Estimates of Expenditures of the GDP at Current and Constant (2011-12) Prices are also released. These estimates have been compiled using the data from the same sources as those used for compiling GVA estimates by economic activity, detailed data available on Merchandise Trade in respect of Imports and Exports, Balance of Payments, and Expenditure of Central and State Governments. As various components of Expenditure on Gross Domestic Product, namely, Consumption Expenditure and Capital Formation, are normally measured at Market Prices, the discussion in the following paragraphs is in terms of Market Prices only.

    18:22 (IST)07 Jan 2020
    Estimates of Gross or Net National Income

    Estimates of Gross/Net National Income and Per Capita Income along with GVA at Basic Prices by kind of economic activity and the Expenditures of GDP for the years 2017-18, 2018-19 and 2019-20 at Constant (2011-12) and Current Prices are given in Statements 1 to 4.

    18:08 (IST)07 Jan 2020
    Manufacturing sector pulls down GDP growth

    The decline in GDP has been mainly on account of deceleration in manufacturing sector growth, which is expected to come down to 2 per cent in 2019-20 from 6.2 per cent in the year-ago fiscal, as per the first advanced estimates of the national income released by National Statistical Office(NSO) on Tuesday.

    18:04 (IST)07 Jan 2020
    Government's final consumption expenditure

    Government Final Consumption Expenditure (GFCE) at Current Prices is estimated at Rs 24.34 lakh crore in 2019-20 as against Rs 21.35 lakh crore in 2018-19. At Constant (2011-12) Prices, the GFCE is estimated at Rs 16.65 lakh crore in 2019-20 as against Rs 15.06 lakh crore in 2018-19. In terms of GDP, the rates of GFCE at current and constant (2011-12) prices during 2019-20 are estimated at 11.9 per cent and 11.3 per cent, respectively, as against the corresponding rates of 11.2 per cent and 10.7 per cent, respectively in 2018-19.

    18:02 (IST)07 Jan 2020
    Second estimates on last day of February

    The release of Second Advance Estimates of National Income for the year 2019-20 and quarterly GDP estimate for the third quarter (October-December), 2019-20 (Q3 of 2019-20) will be on 28.02.2020.

    18:00 (IST)07 Jan 2020
    Estimates on per capita income

    The Per Capita Net National Income during 2019-20 is estimated to be ₹1,35,050 showing a rise of 6.8 per cent as compared to ₹1,26,406 during 2018-19 with the growth rate of 10.0 per cent.

    17:54 (IST)07 Jan 2020
    Manufacturing estimated to see slower growth

    GVA at Basic Prices for 2019-20 from ‘Manufacturing’ sector is estimated to grow by 2.0 per cent as compared to growth of 6.9 per cent in 2018-19. The Private Corporate sector growth in the Manufacturing sector for 2019-20 is estimated using latest available information on major Listed Companies during first half of financial year 2019-20. The Private Corporate sector growth (which has a share of over 75 per cent in the Manufacturing sector) was estimated from available data of Listed Companies with BSE and NSE. The Quasi - Corporate and Unorganized segment (which has a share of over 20 per cent in the Manufacturing sector) has been estimated using IIP of Manufacturing which registered a growth of 0.6 per cent during April-October, 2019-20.

    17:51 (IST)07 Jan 2020
    Most economists downbeat on India's GDP growth

    Most private economists have lowered India's growth forecast to around 5% for the 2019/20 fiscal year, after the central bank cut its growth estimate to 5.0% last month, citing weakening demand and a slowdown in global economic activity.

    17:50 (IST)07 Jan 2020
    Mining and quarrying

    GVA at Basic Prices for 2019-20 from ‘Mining and Quarrying’ sector is estimated to grow by 1.5 per cent as compared to growth of 1.3 per cent in 2018-19. The key indicators of Mining sector, namely, production of Coal, Crude Oil and Natural Gas registered growth rates of (-) 5.3 per cent, (-) 5.9 per cent and (-) 2.6 per cent, during April-November, 2019-20 as compared to 9.0 per cent, (-) 3.6 per cent and (-) 0.7 per cent respectively, during April-November, 2018-19. IIP of metallic minerals grew at 13.7 per cent during April-October, 2019-20 as compared to 2.6 per cent during same period in 2018-19.

    17:49 (IST)07 Jan 2020
    What about agriculture, forestry and fishing

    GVA at Basic Prices for 2019-20 from ‘Agriculture, Forestry and Fishing’ sector is estimated to grow by 2.8 per cent as compared to growth of 2.9 per cent in 2018-19. The GVA estimates of this sector are based on 1st advance estimates of agricultural production during Kharif season of 2019-20 obtained from the Ministry of Agriculture & Farmer Welfare. For Livestock sector, estimates of production of major livestock products (i.e. Milk, Egg, Meat and Wool) obtained from the Department of Animal Husbandry & Dairying and Fish production data obtained from Department of Fisheries have been used. The crops including fruits and vegetables account for about 56 per cent, the livestock products 30 per cent and forestry & fisheries 14 per cent share of GVA in total GVA of ‘Agriculture, Forestry and Fishing’ sector.

    17:45 (IST)07 Jan 2020
    Check growth estimates for different sectors

    The sectors which registered growth rate of over 4.9 percent are, ‘Electricity, Gas, Water Supply and Other Utility Services’, ‘Trade, Hotels, Transport, Communication and Services related to Broadcasting’, 'Financial, Real Estate and Professional Services’ and ‘Public Administration, Defence and Other Services’ at 5.4 per cent, 5.9 per cent, 6.4 per cent, 9.1 per cent respectively. The growth in the ‘Agriculture, Forestry and Fishing’, ‘Mining and Quarrying’, ‘Manufacturing’ and ‘Construction’ is estimated to be 2.8 per cent, 1.5 per cent, 2.0 per cent and 3.2 per cent respectively.

    17:43 (IST)07 Jan 2020
    GVA at basic prices

    Real GVA at Basic Prices is estimated to increase from Rs 129.07 lakh crore in 2018-19 to Rs 135.40 lakh crore in 2019-20. Estimated growth of real GVA in 2019-20 is 4.9 per cent as against 6.6 per cent in 2018-19.

    17:43 (IST)07 Jan 2020
    GDP estimate for FY20

    Real GDP or GDP at Constant Prices (2011-12) in the year 2019-20 is likely to attain a level of Rs 147.79 lakh crore, as against the Provisional Estimate of GDP for the year 2018-19 of Rs 140.78 lakh crore, released on 31st May 2019. The growth in real GDP during 2019-20 is estimated at 5.0 per cent as compared to the growth rate of 6.8 per cent in 2018-19.

    17:18 (IST)07 Jan 2020
    India's GDP grew at 6.81 per cent in FY19

    India's GDP grew at 6.81 per cent in FY19. In September quarter of this fiscal, the GDP growth slipped further to an over six-year low of 4.5 per cent, largely impacted by a slump in manufacturing output.

    17:15 (IST)07 Jan 2020
    Market in recovery mode amid no flare-up in US-Iran tensions

    Indian bourses too staged a recovery after two sessions of sharp losses on Tuesday, following somewhat calmed global markets as no further escalation in US-Iran tussle soothed investor nerves. At the closing bell, the BSE benchmark Sensex was 192.84 points or 0.47 per cent higher at 40,869.47. After opening the session on a bullish note, the 30-share gauge went on to touch a high of 41,230.14 in early deals -- rallying over 553 points during the session.Likewise, the broader Nifty closed 59.90 points or 0.50 per cent up at 12,052.95. The 50-share NSE barometer swung over 159 points during the day.

    17:09 (IST)07 Jan 2020
    Moody's cuts India's GDP growth forecast to 5.6% for 2019

    Moody's Investors Service on Friday said it has lowered its 2019 GDP growth forecast for India to 5.6 per cent as slow employment growth weighs on consumption. It expects economic growth to pick up in 2020 and 2021 to 6.6 per cent and 6.7 per cent respectively, but sees the pace of growth remaining lower than past.

    16:56 (IST)07 Jan 2020
    GDP sees falling trend

    GDP growth stood at 4.8 per cent for the first half of the current fiscal year.

    16:43 (IST)07 Jan 2020
    FM Sitharaman to present budget on February 1

    Finance Minister Nirmala Sitharaman is expected to present the budget on February 1, 2020. The budget is expected to hold importance as it comes at a time when the economy is seeing a prolonged slowdown.

    16:35 (IST)07 Jan 2020
    Thank demonetisation for surplus liquidity, but loan market hit as few takers step up

    Even as credit supply saw growth in recent years, the loan market is still struggling with the demand crisis. Demonetisation is attributed to be the main reason behind the surplus liquidity but this could not help to circulate the credit market due to weakening demand in the economy. It is expected that the growth in the loan market will not revive in the next year as well, however, if markets are allowed to operate in an uninterrupted manner, the revival of credit growth could take considerable time. Click here to know more. 

    16:32 (IST)07 Jan 2020
    Sensex rebounds 193 pts; Nifty reclaims 12K

    The BSE benchmark Sensex recovered by 192.84 points and the NSE Nifty reclaimed the 12,000 level on Tuesday as no fresh aggressive moves from the US and Iran helped crude prices ease. After rallying 553.51 points during the session, the 30-share BSE index ended 192.84 points, or 0.47 per cent, higher at 40,869.47. Similarly, the broader Nifty rose 59.90 points, or 0.50 per cent, to finish at 12,052.95.

    16:28 (IST)07 Jan 2020
    Core sector sees prolonged contraction

    India’s core sector contracted for the fourth consecutive month in November and the industrial production contracted continuously for the three months till October 2019. The eight infrastructure industries grew zero per cent in April-November as compared to 5.1 per cent in the same period a year earlier. In the same line, the GDP growth rate fell to 4.5 per cent in Q2 FY20 from a six-year low growth rate of 5 per cent in the first quarter.

    16:23 (IST)07 Jan 2020
    Moody's cut India's GDP growth rate

    Saying government measures do not address the widespread weakness in consumption demand, Moody’s slashed India’s economic growth forecast to 5.6 per cent for 2019.

    16:22 (IST)07 Jan 2020
    Advance estimates of crop production are released at quarterly periodicity

    For the advance estimates of GDP, which are required to be compiled in the months of January-February, the advance estimates are based on Kharif harvest and rabi sowings. The advance estimates of crop production are released at quarterly periodicity, beginning with the first advance estimates of Kharif production in September.

    16:21 (IST)07 Jan 2020
    Economy grew at 4.5% in Q3FY20

    The economy grew at 4.5% annually in the June-September quarter, its weakest pace in over six years. The GDP data released last month showed government spending helping to prop up weak demand, but private investment growth had virtually collapsed.

    16:19 (IST)07 Jan 2020
    RBI cut India's growth rate

    While maintaining the status quo in its bi-monthly monetary policy review, the Reserve Bank of India on Thursday revised GDP growth downwards to 5 per cent for 2019-20 from 6.1 per cent projected in its October policy.

    16:19 (IST)07 Jan 2020
    GDP growth rate to fall further

    The National Statistics Office (NSO) is expected to announced a GDP growth rate of 5 per cent for 2019-20 (Apr-Mar).

    16:16 (IST)07 Jan 2020
    GDP growth advance estimates due today

    Amid a six-quarter straight fall in GDP growth rate, the government is set to release the first advance estimates of national income, GDP, and other macroeconomic figure.

    15:41 (IST)07 Jan 2020
    FMCG firms to lower ad spends, new launches amid rural slump

    The rural slowdown has been a major pain point for FMCG brands for close to a year now and as no signs of revival are expected soon, the companies are likely to keep a check on their advertisement expenditure and new launches. “Ad-spends and new launches are expected to remain lower than usual as companies await signs of revival,” Motilal Oswal said in a report on Tuesday.

    Full story

    14:08 (IST)07 Jan 2020
    Budget 2020: Ace global investor’s India budget wishlist; spend in this area to boost jobs, economy

    The government must spend more on infrastructure to boost employment and spur economic growth in the upcoming budget, an ace global investor told CNBC TV-18. An increase in spending in infrastructure is expected to speed up commerce and trading activity in the economy, Mark Mobius of Mobius Capital Partners also said in an interview. The move would also help in generating employment as more workers would be needed to work on roads, bridges, and tunnels, he noted.

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    14:07 (IST)07 Jan 2020
    Bank strike amid Bharat Bandh: ATMs, banks services to be hit on 8 January

    Services at several bank branches and ATMs are expected to remain down on 8 January 2020 as thousands of bank employees have threatened to sit for a strike. The protest call was made by ten central unions which called for a nationwide Bharat Bandh tomorrow and the same was supported by six bank employee unions as well. Due to this, banking operations are likely to be affected at several places and union leaders have asked employees to not work.

    Full story

    14:06 (IST)07 Jan 2020
    Will GDP growth fall further? Govt to release first advance estimates today

    Amid a six-quarter straight fall in GDP growth rate, the government is set to release the first advance estimates of national income, GDP, and other macroeconomic figures today. Agencies such as Moody’s and India’s central bank – RBI – have recently cut India’s growth projections citing various reasons. Saying government measures do not address the widespread weakness in consumption demand, Moody’s slashed India’s economic growth forecast to 5.6 per cent for 2019.

    Full story

    12:21 (IST)07 Jan 2020
    Air India sale: Govt looks at major debt recast to attract buyers; Amit Shah-led GoM to meet today

    To make the airline more attractive to buyers, there will be a significant recast of debt and about 80% of the airline’s debt will be moved to a special purpose vehicle (SPV). Of Air India’s total Rs 80,000 crore worth debt, only Rs 10,000-15,000 crore debt will be kept in Air India’s books, ET Now reported.

    Full Story

    11:47 (IST)07 Jan 2020
    RBI extends forex deal hours to boost trade

    India’s monetary authority allowed banks to offer foreign-currency transactions outside of local market hours, a move aimed at boosting trading volumes at home. Interbank deals, as well as those with customers in and outside India, can be undertaken by banks or their overseas branches and units at all times, the Reserve Bank of India said in a statement late Monday. It stopped short of saying whether the timing of the onshore over-the-counter market has been extended from the current 9 a.m. to 5 p.m.

    Full story

    11:47 (IST)07 Jan 2020
    Risks loom for state owned banks relying on sovereign bonds

    With credit growth at multi-year lows, Indian lenders have been binging on sovereign debt. With the government set to borrow more, the move is fraught with risk. Bond holdings as a proportion of aggregate deposits stood at about 29% in the two weeks ended Dec. 20, way higher than the 18.25% mandated by the central bank, according to calculations based on data from the Reserve Bank of India. That leaves banks exposed to losses if yields climb on higher federal borrowings.

    Full story

    11:46 (IST)07 Jan 2020
    Cotton body retains estimate for 2019-20 season at 354 lakh bales

    The Cotton Association of India (CAI), in its December estimate of the crop for the season of 2019-20 starting October 1, has retained its estimate at 354.50 lakh bales of 170 kg each at the same level as in the previous estimate.

    Full story

    11:46 (IST)07 Jan 2020
    State of Indian Economy: PM Modi meets Mukesh Ambani, Tata, Sunil Mittal, Gautam Adani, Anand Mahindra and others

    Prime Minister Narendra Modi on Monday met renowned industrialists, including Ratan Tata, Reliance Industries chairman Mukesh Amabani and Bharti Airtel chairman Sunil Mittal, and is learnt to have discussed ways to arrest the ongoing economic slowdown, attract private invetsments and boost job creation.

    Full story

    11:45 (IST)07 Jan 2020
    US strikes new challenge for India-Iran ties: Trade thrived during sanctions, but things may change now

    While the US-Iran tensions have added to the broader global uncertainties about trade, data show Tehran tends to import more from India when it is hit hard by sanctions and reduces its reliance on the country when times are relatively good. But this time around, exporters fear the stakes are much higher if the US imposes fresh sanctions against Iran.

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    11:44 (IST)07 Jan 2020
    TATA Sons’ conversion: No specific slur on Registrar of Companies, says NCLAT

    Pronouncing its judgment on the RoC appeal on Monday, the NCLAT said, in the absence of any prescription of minimum paid-up share capital required for a private company, the RoC cannot wield any power or jurisdiction to carry out any changes in the Register of Companies or certificate of incorporation of Tata Sons and the Memorandum of Association of the Tata Sons.

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    11:43 (IST)07 Jan 2020
    SC rejects Centre’s plea challenging refund of Rs 104 crore ordered by TDSAT to RCom

    The Supreme Court on Tuesday rejected the Centre’s plea challenging TDSAT’s order directing refund of around Rs 104 crore to Reliance Communication. A bench of justices R F Nariman and S Ravindra Bhat said, “We don’t find any merits in the appeal”.

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