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Despite geopolitical tensions in <keyword id="19897269" type="General" weightage="20" keywordseo="europe" source="keywords">Europe</keyword> and the <keyword id="19904316" type="General" weightage="20" keywordseo="middle-east" source="keywords">Middle East</keyword>, <keyword id="19895063" type="General" weightage="20" keywordseo="india" source="keywords">India</keyword>'s <keyword id="20631272" type="General" weightage="20" keywordseo="merchandise-exports" source="keywords">merchandise exports</keyword> grew by 5.8% to $109.96 billion compared to $103.9 billion in the same period last year, according to a CRISIL report. The report states that the deceleration in the growth momentum of exports in June compared to May was largely due to an 18.2% contraction in oil exports. The growth momentum slowed down in June, with merchandise exports increasing by only 2.6% year-on-year, down from 9.1% in May. Non-oil exports continued to maintain steady growth, rising by 7.7% in June, almost in line with the 7.8% growth recorded in May. Services exports exhibited a strong performance in June, contributing positively to the overall trade scenario. The positive aspect is that merchandise imports grew at a slower pace of 5% year-on-year in June, down from 7.7% in May. However, core imports, excluding oil and gold, surged by 7.1%, increasing from the 0.8% growth in the previous month. This spike in core imports was partially driven by a low base effect from the previous year. Despite the positive growth in exports, the <keyword id="20201391" type="General" weightage="20" keywordseo="trade-deficit" source="keywords">trade deficit</keyword> widened to $21 billion in June from $19.2 billion in the same month last year. For the first quarter, cumulative imports rose by 7.7% to $172.4 billion from $160 billion, resulting in a trade deficit of $62.44 billion, up from $56.1 billion. This widening deficit was mainly due to a higher oil trade deficit, while the non-oil trade deficit narrowed. Services exports were a bright spot, increasing by 10.2% year-on-year to $29.76 billion in May. On the other hand, service import growth moderated to 5.4%, down from 19.1% in the previous month. Consequently, the services trade surplus expanded to $13.02 billion, up from $11.1 billion in May last year. Oil exports fell by 18.3% year-on-year and 18.5% month-on-month in June, despite stable international prices. This suggests a reduction in export volumes, with exports falling to $5.5 billion from $6.8 billion in June last year and the previous month. Oil imports increased by 19.6% in June compared to 28% in May, driven by domestic demand and local refineries operating above capacity. Sectors such as drugs and pharmaceuticals, engineering goods, organic and inorganic chemicals, and ready-made garments showed positive growth. However, pharmaceuticals (9.9% vs. 10.5%) and ready-made garments (3.7% vs. 9.8%) saw slower growth compared to May. Gems and jewellery exports continued to decline, marking the seventh consecutive month of negative growth at -1.4% year-on-year. Growth in carpets, handloom products, man-made products, plastics, and linoleum was positive but slower than the previous month. Handmade carpets (-16.6% vs. 20.6%), jute manufacturing (-11.1% vs. -5.2%), and leather products (-2.2% vs -2.1%) recorded contractions. Cashew exports have been declining since 2018, with only sporadic months of positive growth. In June, cashew exports fell by 7.3%, an improvement from the 25.8% decline in May. Coffee (70% vs. 64.2%), fruits and vegetables (7% vs. 20.8%), rice (1% vs. 2.8%), spices (9.8%vs. 20.3%), tea (3.2% vs. 19.6%), and tobacco (37.7% vs. 58.4%) saw slower growth compared to May. Marine products (-7.7% vs. -3.9%) and meat, dairy, and poultry products (-13.9% vs. 22.9%) also experienced a decline. Increases were noted in electronic goods (15.9% vs. 6.7%), fruits and vegetables (22.6% vs. 3%), non-ferrous metals (47.6% vs. 1.1%), project goods (31.4% vs. -44.3%), textiles and yarn fabric made-up articles (23.8% vs. -1.1%), and wood products (16.2% vs. -7.2%). The fiscal year has started positively with steady merchandise export growth in the first quarter. Encouragingly, multilateral organisations have forecasted better year-on-year trade growth. The Indian government's focus on foreign trade agreements (FTAs) is expected to further boost trade. However, the persistent growth in imports surpassing exports is a concern, widening the trade deficit. The recent US tariff hikes on Chinese imports could lead to potential dumping by China in the Asian market, including India, which requires close monitoring. Despite these challenges, the expected moderation in domestic growth may help contain import growth and the trade deficit. The service trade surplus and robust remittance flows are positive indicators that the current account will remain stable.

Indian exports show resilience amid global challenges in first quarter, says CRISIL report

A slowdown in 2023 in advanced economies, especially the US and the eurozone, is expected to make <keyword id="3658" type="General" weightage="80" keywordseo="india" source="Orion">India</keyword>'s <keyword id="23820" type="General" weightage="20" keywordseo="footwear" source="Orion">footwear</keyword> and leather products export trade vulnerable, said <keyword id="183985" type="General" weightage="50" keywordseo="crisil-ratings" source="Orion">Crisil Ratings</keyword>. "Domestic labour-intensive sectors such as textiles, footwear, and leather depend significantly on these two regions, making them particularly vulnerable to a slowdown in these economies," it said in a report titled 'The Slowdown Shadow'. It said since these regions being two of India's largest export destinations, a slowdown in their economies would lower demand for Indian <keyword id="35090" type="General" weightage="20" keywordseo="exports" source="Orion">exports</keyword>. Many economists and global institutions earlier projected to a global slowdown in 2023, as the impact of continued monetary policy tightening across major economies manifests. Raising interest rates typically cools demand in the economy and thus helps in managing inflation, but it also has the potential to trigger a slowdown in overall economic activities. "Advanced economies are expected to bear the brunt as they aggressively pursued monetary tightening in 2022," <keyword id="6359483" type="General" weightage="100" keywordseo="crisil" source="Orion">Crisil</keyword> said. The forecast of a global slowdown, Crisil said, is worrisome because India's growth cycles have become highly synchronised with those of advanced economies over the years. "The most important and direct impact of this will be reduced demand for Indian goods abroad. The US and European Union (EU) are two of the largest destinations, accounting for 18 per cent and 15.4 per cent, respectively, of India's merchandise exports in fiscal 2022," it added. It also raised concerns about India's textile exports. "It is noteworthy that labour-intensive categories such as leather articles, footwear, and textiles have the highest export dependence on these advanced economies," the report added.

India's footwear, textile exports vulnerable to global slowdown: Crisil

The COVID-19 pandemic and the ensuing economic impact will lead <keyword id="612887" type="PERSON" weightage="20" keywordseo="Bank-credit-growth">bank credit growth</keyword> to nosedive to only 1 per cent in 2020-21, as against the 6.14 per cent achieved in the the last financial year, a report said on Monday. Domestic rating agency Crisil, which estimates bank credit growth to come at 0-1 per cent in this financial year, had earlier predicted it to expand by 8-9 per cent. Bank credit is an important factor illustrative of the general economic climate because it denotes aspects like the investments which are happening in a country or consumption of high-value items. Crisil expects a 5 per cent contraction in India's GDP for 2020-21. "The impact of the pandemic on credit growth will be a whopping 8 per cent," a Crisil statement said stressing that lenders' confidence needs to be boosted to push the number up. "This crisis is unprecedented and so will be its economic fallout – such as lower capex demand as well as lower discretionary spends, to name some – which will slow down credit offtake significantly across segments in the current fiscal," its senior director Krishnan Sitaraman explained. The low-base and a gradual economic recovery will push up the credit growth to high single digits in 2021-22, the agency said. It, however, rued that in the present, the uncertainty has made lenders risk-averse. "While the Reserve Bank of India has been reducing policy rates and the government has introduced measures to encourage lending, banks continue to be risk-averse, as reflected in higher surplus liquidity parked with the central bank and the high credit spreads for most borrowers," its director Subha Sri Narayanan said. Sitaraman said the corporate loan portfolio, which constitutes over half of the overall assets, will be the worst hit and is expected to de-grow during the fiscal because the lockdown has led to significant disruption in operations with limited capacity utilisation across sectors. Job losses and salary cuts will reduce expenditure on discretionary items and result in a slide in retail loans, which account for about a fourth of bank credit, it said. Purchase of new homes and vehicles are expected to be delayed, impacting demand for financing, it said, adding disbursements across most asset classes will see a significant decline this fiscal. The overall retail loans growth will fall to low single digits as against mid-teens over the last few years, it said. Factors aiding the retail growth to be in the positive territory will be lower repayments due to the moratorium and capitalization of the accumulated interest, it said. Loans to micro, small and medium enterprises and agriculture offer some solace for lenders this fiscal, the rating agency said. On the back of the government's fiscal stimulus package, small business loans will increase by 6-7 per cent and are likely to be driven by state-owned lenders, it said. Agri loans will grow by 3-4 per cent supported by expectations of a normal monsoon and a faster recovery in rural areas. SEE ALSO: <a href="https://www.businessinsider.in/finance/news/sbi-axis-bank-and-kotak-mahindra-bank-and-other-banking-stocks-are-raising-capital-to-fill-npa-hole/articleshow/76054599.cms">Indian lenders like SBI, Axis Bank and others need $20 billion⁠ in capital— most of it will go into filling up NPA holes</a> <a href="https://www.businessinsider.in/business/news/yes-bank-case-ed-raids-five-premises-of-cox-and-kings-in-mumbai/articleshow/76256791.cms">Yes Bank's top borrower Cox and Kings sees raids at five of its premises</a> <a href="https://www.businessinsider.in/stock-market/markets/news/sbi-share-price-is-up-5-are-brokerages-raise-target-prices-to-over-200/articleshow/76254529.cms">SBI share price is up 5% as brokerages raise target prices to over ₹200</a>

CRISIL forecasts bank credit growth will plummet to 1% with the economic fallout COVID-19

<ul><li>As effects of post-Covid reopening fades, India’s growth momentum could slow down next year, says a <keyword id="6361649" type="General" weightage="80" keywordseo="goldman-sachs" source="Orion">Goldman Sachs</keyword> report. </li><li>CRISIL cut its Indian GDP growth forecast for FY23 to 7% from 7.3% earlier. </li><li>In November, Moody’s cut its India GDP growth forecast for 2022 to 7% from its earlier estimates of 7.7%. </li><li>RBI too revised its GDP growth rate estimates for FY23 to 7% from 7.2% earlier. </li></ul>India’s GDP growth will slow down in the next calendar year of 2023, says a note released by Goldman Sachs. It has slashed GDP growth expectations to 5.9% next year, as compared to the 6.9% growth of 2022. India’s growth momentum will be affected by the fading effects of post-Covid reopening, coupled with higher borrowing costs, as per Goldman Sachs. “Growth will likely be a tale of two halves, with a slower first half as the reopening boost fades, and monetary tightening weighs on domestic demand. In the second half, growth is likely to re-accelerate as global growth recovers, drag from net exports diminishes, and investment cycle picks up,” said Goldman Sachs per a <a href="https://economictimes.indiatimes.com/news/economy/indicators/goldman-sachs-slashes-indias-gdp-forecast-for-2023-to-5-9/articleshow/95651040.cms">Bloomberg report</a>. Goldman Sachs expects the global economy to grow at 1.8%, as US resilience contrasts with a European recession, and a bumpy reopening in China. “Global growth slowed through 2022 on a diminishing reopening boost, fiscal and monetary tightening, China’s Covid restrictions and property slump, and the Russia-Ukraine war,” said a redacted version of Goldman Sachs report on November 16. In the second week of November, Moody’s too cut its India GDP growth forecast for 2022 to 7% from its earlier estimates of 7.7%. The <a href="https://economictimes.indiatimes.com/news/economy/indicators/moodys-cuts-2022-growth-forecast-for-india-to-7/articleshow/95445091.cms">rating agency has cited rising inflation</a> coupled with high interest rates and a slowing global economy as the reasons behind the same. However, Moody’s pegged India’s GDP growth rate at 4.8% for 2023 – much lower than that of Goldman Sachs’ report. On Monday, CRISIL cut its Indian GDP growth forecast for FY23 to 7% from 7.3% earlier. This agency too expects FY24 growth to slow down further to 6%. RBI too revises estimates CRISIL’s estimates are in line with RBI’s estimates which too revised its GDP growth estimates in September for the financial year 2022-23 from 7.2% to 7%. For the first quarter of FY23, India’s GDP grew at 13.5%. In spite of its double digit growth, it had missed many estimates, forcing agencies like SBI and Citibank to recalibrate their <a href="https://www.businessinsider.in/finance/news/rating-agencies-revise-gdp-growth-estimates-yet-again-most-now-peg-it-below-7/articleshow/93944018.cms#:~:text=it%20below%207%25-,Rating%20agencies%20revise%20GDP%20growth%20estimates%20yet%20again,now%20peg%20it%20below%207%25&amp;text=India's%20GDP%20growth%20for%20the,was%20released%20by%20the%20government.">estimates for the financial year</a> and the RBI was the latest to do so. “While the real GDP growth in the first quarter of this year turned out to be lower than expectations, nonetheless it was 13.5% and perhaps the highest among the major global economies," RBI governor Shaktikanta Das <a href="https://www.businessinsider.in/finance/news/rbi-hikes-repo-rate-by-50-bps-taking-it-to-a-three-year-high-of-5-9-das-says-inflation-at-alarmingly-high-levels/articleshow/94550429.cms">said</a> on September 30. Like most central banks around the world, India too has hiked base interest rates four times this financial year on account of rising inflation. The base interest rate rose cumulatively by 1.9%, and now stands at 5.9%. For the month of October, exports shrunk by 16.6%, while imports rose – expanding the country’s <a href="https://www.businessinsider.in/india/news/exports-shrink-by-16-6-to-29-78-bn-in-oct/articleshow/95532058.cms">current account deficit</a>. The retail inflation cooled to a <a href="https://www.businessinsider.in/finance/news/retail-inflation-eases-to-6-7-in-october-from-7-4-in-september/articleshow/95512476.cms">three-month low of 6.7%</a>, but was however above the RBI’s tolerance limit of 6%. Retail inflation had been above the RBI’s comfort zone for the last ten months. Q2 growth rate estimated at 6.5%: ICRA Apart from macroeconomic effects, India’s growth story is also affected by a myriad of factors including erratic monsoons and more. As per an ICRA report, India’s pace of economic growth is expected to halve in the second quarter, as compared to the first. As per the rating agency’s note, Q2 GDP growth is expected to be at around 6.5% – half of Q1 GDP growth. “Economic activity in Q2 FY2023 benefitted from robust demand for contact-intensive services, healthy capital spending by the Government of India (GoI) and pre-festive season stocking of goods. The downsides arose from the mixed crop output trends revealed by the advance estimates of kharif production, adverse input cost movements for certain sectors with a higher fuel intensity, as well as the impact of the flagging external demand on non-oil merchandise exports,” said the ICRA report. The contribution of agriculture to the nation’s growth is estimated at a modest rate of around 2.5% by ICRA for the quarter. “Untimely heavy rainfall in the North-west and Central India is likely to have added to the moisture levels of the standing crop, which poses some downside risks to the kharif output relative to first advance estimates,” the ICRA report said. However, ICRA’s estimates are slightly higher than that of the Reserve Bank of India’s estimates for the second quarter – at 6.3% in Q2; tapering further to 4.6% each in Q3 and Q4.

India's GDP growth forecast continues to see cuts

<ul><li>The <keyword id="30067" type="General" weightage="20" keywordseo="rbi" source="Orion">RBI</keyword> on Friday cut its economic growth estimate for fiscal year 2023 to 7% from 7.2% forecast earlier.</li><li>India’s central bank has lowered its growth estimates due to constant geopolitical tensions, monetary policy tightening across nations and elevated inflation.</li><li>Several rating agencies have also recently trimmed their annual growth rate projections after GDP growth rate fell short of expectations in the past quarters.</li></ul>The <keyword id="6354335" type="General" weightage="20" keywordseo="reserve-bank-of-india" source="Orion">Reserve Bank of India</keyword> (RBI) on Friday cut its economic growth estimate for fiscal year 2023 to 7% from 7.2% forecast earlier. While it expects GDP growth to drop to 4.6% in the third and fourth quarter, respectively, from the estimated 6.3% in the second quarter, the broad expectation is that economic activity will recover by the first quarter of the next fiscal year. India’s central bank has lowered its growth estimates on risks emanating from geopolitical tensions, monetary policy tightening across nations and elevated inflation. Global growth is expected to slow down from 6.1% in 2021 to 3.2% in 2022 as the outlook is “gloomy and more uncertain,” <keyword id="7268643" type="General" weightage="20" keywordseo="rbi-governor-shaktikanta-das" source="Orion">RBI Governor Shaktikanta Das</keyword> said in his speech on Friday. “Against this challenging global environment, economic activity in India remains stable. While real GDP growth in Q1:2022-23 turned out to be lower than our expectations, the late recovery in kharif sowing, the comfortable reservoir levels, improvement in capacity utilisation, buoyant bank credit expansion and government’s continued thrust on capital expenditure are expected to support aggregate demand and output in H2:2022-23,” Das said. Markets reacted positively to the 50-basis-point rate hike on Friday, as the outlook for India is relatively better than most developed economies, which are expected to slip into recession in the aftermath of the massive rate hike cycle undertaken earlier this year. India’s been battling several of these risks, but with capital outflows abating and prices of several commodities cooling, the risk to the external sector has abated. India’s import cover stands at nine months, from 20 months a year ago. There’s been much talk about India’s decoupling from the rest of the world, with many believing that India is an oasis in the midst of a global sand storm. While there’s no doubt that India has been hit by the fallout of the war and rate hikes undertaken by central banks across developed markets, economic activity remains stable. The positive commentary by the RBI Governor helped cheer markets despite the rate hike. Inflation in India has been lower than the double-digit spikes seen in many other developed countries. The fight against inflation may call for more rate hikes by the RBI, but robust demand could save the day for economic growth. With rainfall coming in higher than the long-period average across most parts of India, higher rural consumption could provide a kicker to economic growth this festive season. According to Nomura’s India economist and vice president, Aurodeep Nandi, “The relatively unchanged growth and inflation outlook by the RBI indicates that the policy arithmetic hasn’t materially changed for it.” While the Indian economy continues to battle the aftershocks of the pandemic, war in Ukraine and aggressive rate tightening cycle in most developed markets, the havoc is still not as bad as it has been for many other economies. Real economic growth in the April-June quarter of the current fiscal year was at 13.5% on a year-on-year basis, surpassing the pre-pandemic level by 3.8%. This growth has been driven by private consumption largely and investment demand. High frequency indicators also suggest that the second half of the fiscal should continue to be buoyant. Not just the RBI, but several rating agencies have also recently trimmed their annual growth rate projections after the GDP growth rate fell short of expectations in the past quarters. “Rising interest rates, uneven distribution of monsoons and slowing global growth will dampen economic momentum,” said Moody’s while cutting growth forecasts on September 1. It cut calendar year 2023 growth rate projections to 5.2%. <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Institution </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">GDP forecast cut FY23 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Earlier projection </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Moody’s </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">5.2% (Calendar year 2023) </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">5.4% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">International Monetary Fund (IMF) </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.4% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">8.2% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Nomura </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">4.7% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">5.4% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FICCI </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.4% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Goldman Sachs </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.2% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Asian Development Bank </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.5% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">CRISIL </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.3% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.8% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">SBI </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">6.8% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.5% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">YES Bank </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">6.9% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7% </td></tr></tbody></table> With prices of most commodities coming off the highs seen during the first half of the fiscal year, markets are betting on a better second half. The RBI Governor echoed this sentiment on Friday in his speech. The August consumer price inflation remains elevated and above the upper tolerance band of the RBI, however, a good kharif crop and declining prices of most commodities could bring some respite to inflation. Das in his speech said: “The recent correction in global commodity prices including crude oil, if sustained, may ease cost pressures in the coming months. The inflation trajectory remains clouded with uncertainties arising from continuing geopolitical tensions and nervous global financial market sentiments.” Clearly, the battle against inflation is not over and more rate hikes are in the offing. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/news/rbi-hikes-repo-rate-by-50-bps-taking-it-to-a-three-year-high-of-5-9-das-says-inflation-at-alarmingly-high-levels/articleshow/94550429.cms">RBI hikes repo rate by 50 bps, taking it to a three-year high of 5.9% – Das says inflation at ‘alarmingly high levels’ across jurisdictions</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/news/e-commerce-sales-will-drive-credit-cards-spends-in-september-says-report/articleshow/94538013.cms">E-commerce sales will drive credit cards spends in September, says report</a>

RBI cuts FY23 GDP growth forecast to 7% as developed world heads into recession

Mumbai, Dec 2 () Rating agency Crisil on Monday sharply cut its growth forecast for the current financial year to 5.1 per cent from an earlier estimate of 6.3 per cent. 
 The move comes ahead of the RBI's announcement on lending rates on December 5. The RBI's monetary policy committee (MPC) will meet between December 3-5 to review the interest rates.
 Crisil's revision, which is among the lowest after Japanese brokerage Nomura's 4.7 per cent forecast, comes within days of the official data showing a further slip in the second quarter growth to 4.5 per cent. This leaves the first half (April-September) growth at 4.75 per cent, a multi-year low.
"Key short-term indicators like industrial production, merchandise exports, bank credit offtake, tax mop-ups, freight movement, and electricity production, all point to a weakening growth momentum," Crisil said in a research report. 
However, it expects a "mild" pick-up in growth in the second half.
Growth in the second half of 2019-20 will go up to 5.5 per cent, up from the 4.75 per cent in the first half, the agency said.
In October's policy review, the RBI revised downwards its estimate for GDP growth for the current fiscal to 6.1 per cent from 6.9 per cent estimated earlier.
 The central bank is widely expected to slash rates for the sixth time on December 5. In five reductions so far in 2019, interest rates have been lowered by a total of 135 basis points over concerns that growth momentum is slowing down and also to try to boost liquidity in the financial system. AA BEN ANU

Crisil slashes FY'20 growth forecast to 5.1 per cent

Mumbai, Mar 26 () The severe dent in the economic activity due to the coronavirus pandemic led rating agency Crisil to sharply cut its growth estimate for 2020-21 to 3.5 per cent, on Thursday. Earlier, the agency had predicted an economic growth of 5.2 per cent for the next financial year. The agency welcomed the Rs 1.70-lakh crore package announced by Finance Minister Nirmala Sitharaman earlier in the day but said more measures like loan forbearances for small businesses and households are necessary. The country has been placed in a 21-day lockdown since Wednesday as authorities try to restrict the spread of coronavirus and minimise the number of infected cases. Currently, 13 people have succumbed to the virus and over 650 infected. "The pandemic in India and the consequent lockdown for 21 days pose a material risk to our India economic outlook. The adverse effects that will follow can dwarf the gains from the sharp drop in crude oil prices, and the anticipated monetary and fiscal stimuli," it said. The agency said the pandemic's cost is not only restricted to financial one like the post-Lehman Brothers crisis of 2008, but it also involves enormous human suffering that has not been witnessed in decades. Crisil Chief Economist Dharmakirti Joshi said the estimate of 3.5 per cent growth in 2020-21 assumes a normal monsoon and also a subsidising of the pandemic's economic impact in the June quarter. "The slump in growth will be concentrated in the first half of the next fiscal, while the second half should see a mild recovery," he said. Social distancing and discretionary spends will be hit in the June quarter, it said adding that sluggish growth in advance economies will also hit Indian exports. Even though services, which account for 41 per cent of the total exports, have been resilient so far, the impact in advance economies will hit indian IT and tourism sectors and dent export earnings, it said. The ongoing lockdown is affecting manufacturing activity and also services and, in turn, affecting the domestic supply chains, the agency said adding that daily wage earners will be in the firing line. "The non-linearity and complexity of what's unfolding creates uncertainties not only for businesses but for all mankind, and weighs heavily on sentiment and outlook, with risks tilted to the downside. Inability to control the pandemic and extension of the lockdown will aggravate supply and demand shocks," Crisil Chief Executive and Managing Director Ashu Suyash said. She also conceded that this is the reason why it is hard to quantify the downside at the present moment. On inflation, it said even though there can be a spike in the near term because of panic buying, price rise will eventually soften in the next financial year. A slew of analysts have been cutting their growth estimates in the light of the coronavirus impact, with some reports also saying that there will be a shrinking of the economy in the first quarter of the next financial year when the impact of the virus will be the highest. In a report earlier in the day, Singaporean bank DBS cut its 2020-21 growth forecast to 4 per cent. AA HRS

Crisil cuts FY21 growth estimate sharply to 3.5 pc

Mumbai, Feb 2 () Economists at domestic rating agency Crisil doubt the budget attaining its targets on growth, given the rural boost and thus consumption and revenue realisations, saying planned budgetary measures are not expected to provide a short-term boost.
Noting that the economy is facing its worst slowdown in over a decade, a Crisil report has said this was because consumption and investment have stopped firing for too long.
If at all the GDP were to clip at the projected 5.7-6.6 percent in FY21, it will be thanks more to the base effect-FY20 growth at an 11-year low of 5 percent, down from 6.1 percent in FY19 on the back of a 48 year low nominal growth of at 7.5 percent in FY20. 
"The given its tied hands, the government has aimed at some measured moves in the budget to bolster growth. Most of these, however, are not expected to provide a short-term boost," says the Crisil report.
"In the absence of growth kickers, growth pick-up in fiscal 2021 is expected to be largely led by the base effect and supported by somewhat better farm income (led by a good rabi crop) and the delayed impact of monetary easing. Critical to this forecast is the assumption of a normal monsoon in the next season and benign global crude oil prices," it warns. 
"If that sounds bad, the financial sector stress has been looping into real sector weakness, dragging down growth some more. The external front has also landed the domestic economy a few blows. What makes this "shrinking" feeling stranger and last longer is the long-overdue financial sector clean-up, at a time when the economy is suffering from many other ailments.
"To be sure, monetary policy has done its bit, but with moderate and slow success. The Reserve Bank cut the repo rate cumulatively by 135 basis points through calendar 2019, but lending rates has tarried with just 50-bps decline," the report notes.
The additional fiscal space of 50 bps more over FY20 budget estimate projection for FY21 (fiscal deficit projected at 3.5 percent of GDP next fiscal against the glide path of 3 percent) is to be funded by aggressive disinvestment, asset monetisation and telecom revenues, optimistic tax-buoyancy assumptions and some tightening in overall expenditure. But the space so created is being used to fund capex and rural sector spending that support consumption, it says.
It can be noted that this is the fourth consecutive budget that the Modi government has missed the original budget estimates on deficit numbers.
Despite tight fiscal conditions, the budget makes room for higher capex. Overall capex is budgeted to increase 18 per cent in fiscal 2021. A large part of this is infra spending. But ironically, the overall infrastructure spending is budgeted to decline 7 per cent in FY21 because of lower reliance on extra budgetary spending through central public sector units despite higher budgetary support.
Similar is the projected slowdown revenue expenditure in fiscal 2021, led by lower burden of food, fuel and fertiliser subsidies. BEN MKJ

Budget measures too long term, unlikely to meet growth targets in FY21: Crisil

<ul><li>Revenues of India’s <keyword id="48154" type="General" weightage="70" keywordseo="diamond-industry" source="Orion">diamond industry</keyword> set to fall 30-35% in FY24 as economic slowdown in three key markets hurt exports.</li><li>While high inventory of <keyword id="6368047" type="General" weightage="60" keywordseo="diamonds" source="Orion">diamonds</keyword> will impair profitability, lower borrowings and debt by polishers will lower risk.</li><li>Industry in a bind as demand slows and supply of roughs also gets impacted due to geopolitical tensions in Russia and West Asia. </li></ul> Diamond polishing industry is headed for turbulent times as revenues are expected to drop 30-35% year-on-year to $14-15 billion in the fiscal year 2023-24, thanks to demand slowdown as economic slowdown deepens in the industry’s main markets — the US, the European Union (EU) and China. Forecast by Crisil Ratings is based on analysis as the three geographies account for nearly 75% of India’s polished diamond exports (US accounts for 35% of exports, China 30% and the EU around 10%). High inventory of polished diamonds amid falling retail prices will impair profitability of polishers. The silver lining is that a shrinking business translates to reduced debt, which will offer some offset against the pressure on credit risk profiles of diamond polishers. A study of 46 of them rated by CRISIL Ratings, accounting for over a fifth of the ₹180,000 crore industry by revenues last fiscal, indicates as much. Demand for polished diamonds had started weakening since last fiscal amid slowing economic activity leading to a volumetric drop of ~25%. But worries about supply of rough diamonds following western sanctions on Russian mining major Alrosa supported prices. Polished diamond prices on average were up nearly 10% last fiscal on-year. This helped arrest the decline in India’s polished diamonds exports to $22 billion last fiscal from $24.2 billion in fiscal 2022. It is not just about weaker demand, even the supply of roughs has been impacted due to disruption. Consequently, prices of roughs have corrected, leading to polished diamonds getting cheaper by 10-15%. Woes of the diamond industry are not merely related to supply and demand. They also have to do with a new challenger – lab-grown diamonds (LGDs). These diamonds have more than doubled their market share to ~15% compared to last year, despite prices halving. LGDs are 20-40% cheaper than natural diamonds yet have quite similar characteristics, which poses a real threat to the natural stones, says Crisil. Says Rahul Guha, Director, CRISIL Ratings, “Israel imports ~$1.25 billion worth of polished diamonds annually from India. With the country now declaring a war on the Palestinian militant group Hamas, this number could be at risk. To be sure, there is some bump-up in demand in the second half of every fiscal year from festivities such as Thanksgiving, Christmas and the Chinese New Year, but this is unlikely to provide a significant offset. Consequently, we see the Indian diamond industry shrinking by over a third on an annualised basis this fiscal.” With the inventory of higher-cost polished diamonds piling up to over 4 months of sales, profitability of polishers will be chiselled 50-100 basis points amid lower retail prices Crisil Ratings says in its research. Says Rushabh Borkar, Associate Director, CRISIL Ratings, “The overall working capital of the diamond polishers will reduce 30-40% this fiscal on a diminished scale of business. Though their receivables cycle currently is under control at ~90 days, some polishers could face a stretch depending on their position in the value chain and their counterparties. This remains a monitorable.” Reduced working capital borrowings will bring the overall indebtedness, or the ratio of total outside liabilities to tangible net worth, down to ~1 time as on March 31, 2024, from 1.3 times a year back. However, a dip in profitability will reduce the interest coverage to ~ 3 times this fiscal from over 4 times last fiscal. This will exert pressure on credit risk profiles. All said, Crisil is of the view that the effect of sanctions on Russia and the ongoing conflict in the Middle East will bear watching.

Diamond polishing industry caught between lab grown rocks and economic slowdown

<ul><li>India's economy grew by 6.3% in Q2 of FY23 as compared to 8.4% growth it had seen in Q2 FY22. </li><li>Analysts predicted that the Indian economy would expand at half of the growth rate of 13.5% recorded in the April-June quarter this fiscal. </li><li>China registered an economic growth rate of 3.9% in July-September, 2022. </li></ul>India's economy grew by 6.3% in the second quarter of the current fiscal, official data released on Wednesday showed. The gross domestic product (GDP) had expanded by 8.4% in the July-September quarter of 2021-22, according to data released by the National Statistical Office (NSO). Analysts had projected the Indian economy would expand at half of the growth rate of 13.5% recorded in the April-June quarter this fiscal. According to rating agency ICRA, the GDP was likely to grow at 6.5% while State Bank of India projected the growth rate at 5.8% in the September 2022 quarter. Earlier this month, in an article published in the Reserve Bank of India (RBI) bulletin, the GDP growth was pegged at 6.1-6.3% in the second quarter of this fiscal year. China registered an economic growth rate of 3.9% in July-September, 2022. ‘Manufacturing disappointed with negative growth rate’ Bank of Baroda report said that the Q2 GDP numbers were slightly lower than their forecast of 6.5%. “While most numbers were on expected lines, manufacturing has been a disappointment with a negative growth rate. In case of manufacturing it has been clearly affected by low growth for the small and medium enterprises (SME) sector as per index of industrial production (IIP) numbers, and fall in profits that has affected value added for the organized sector,” said Madan Sabnavis, chief economist of Bank Of Baroda. He added that the agriculture growth of 4.6% should be viewed with caution as it is early days of Kharif harvest, and the allied sectors are more likely to have pushed up this growth rate. “We do expect GDP growth to be around 6.8% for the year, with a downward bias depending on the changing economic environment. But the downside will not be more than 0.2-0.3%,” said Sabavis. Mining and manufacturing sectors have both witnessed negative growth rates. While the mining sector growth might have been affected by a high base effect, combined with fall in output of oil and gas. FY23 GDP downgrades continue In the first quarter of FY23 as lockdowns ended, GDP expanded by 13.5%. However, this was also lower than most estimates – sending many agencies and the RBI itself to revise their growth projections of the year to 7% this September, from 7.2% earlier. On Monday, rating agency <a href="https://www.businessinsider.in/india/news/sp-cuts-indias-growth-forecast-to-7-for-fy23/articleshow/95821441.cms">Standard &amp; Poor’s said that it </a>now expects India’s GDP to grow at 7% for FY23 as compared to the 7.3% it had estimated earlier. CRISIL estimates mirror S&amp;P’s – as it lowered from 7.3% to 7% – but over a week ahead of S&amp;P. CRISIL also expects FY24 growth to slow down further to 6%. Goldman Sachs, like CRISIL, believes that India’s growth momentum will be affected by the fading effects of post-Covid reopening, coupled with higher borrowing costs. A couple of weeks back, it slashed GDP growth expectations to 5.9% next year, as compared to the 6.9% growth of 2022. All in all, most agencies believe that it has become tougher to predict the pace of growth since the pandemic. “We however believe there is somehow a large disconnect between leading indicators and GDP growth since the onset of the pandemic. Growth impulses continue to be strong and it may be better to look through the GDP headline numbers for a couple of quarters before arriving at a definitive conclusion about the growth trajectory,” said SBI Ecowrap in a report released on November 28. (With inputs from PTI) SEE ALSO <a href="https://www.businessinsider.in/finance/news/no-end-to-downgrades-in-gdp-estimates-as-economists-remain-divided-on-severity-of-slowdown/articleshow/95847763.cms">No end to downgrades in GDP estimates as economists remain divided on severity of slowdown</a> <a href="https://www.businessinsider.in/india/news/government-listed-private-companies-capex-to-touch-21-lakh-crore-in-fy23-icici-securities/articleshow/95858117.cms">Capex cycle to touch ₹21 lakh crore in FY23, but there's a catch</a>

India's GDP growth comes in at 6.3% in Q2: manufacturing, mining witness negative growth

<ul><li>There is a wide divergence in market consensus regarding Q2 GDP numbers to be released on November 30, said SBI Ecowrap. </li><li>On Monday, rating agency <a href="https://www.businessinsider.in/india/news/sp-cuts-indias-growth-forecast-to-7-for-fy23/articleshow/95821441.cms">Standard &amp; Poor’s </a>shared that it now expects India’s GDP to grow at 7% for FY23 as compared to the 7.3% it had estimated earlier. </li><li>India’s growth momentum will be affected by the fading effects of post-Covid reopening, coupled with higher borrowing costs, as per <keyword id="6361649" type="General" weightage="80" keywordseo="goldman-sachs" source="Orion">Goldman Sachs</keyword>. </li></ul>SBI Ecowrap has pegged India’s GDP growth rate for Q2 FY23 at 5.8%, much lower than the RBI’s estimate of 6.3%. The research report which was released late Monday, also said that this growth is shrouded in significant uncertainties. “There is a wide divergence in market consensus regarding Q2 GDP numbers to be released on November 30. Consensus estimates are at 6.1%. A range of 5.6%-6% is better than a point estimate,” the report said, which is using a new model to predict how the economy is growing, with a lag. As per its estimates of Q2 growth, its fiscal year growth estimates too stand at 6.8%, as compared to the popular consensus of 7%. “Overall, a sub 6% growth if it materialises in Q2, could imply that India is likely to have expanded at lower than the 7% benchmark. We however believe there is somehow a large disconnect between leading indicators and GDP growth since the onset of pandemic. Growth impulses continue to be strong and it may be better to look through the GDP headline numbers for a couple of quarters before arriving at a definitive conclusion about the growth trajectory,” said SBI Ecowrap. SBI’s commentary is in contrast to ICRA’s Q2 growth predictions that came on November 21, which pegs Q2 growth at 6.5% – half of the growth seen in Q1, but also ahead of RBI estimates. While the first quarter of FY23 exhibited double digit growth at 13.5%, it had missed estimates, sending many agencies to recalibrate their projections of the year. Apart from SBI and Citibank, RBI too had changed its annual growth estimates - leading many agencies to follow suit. On Monday, rating agency <a href="https://www.businessinsider.in/india/news/sp-cuts-indias-growth-forecast-to-7-for-fy23/articleshow/95821441.cms">Standard &amp; Poor’s </a>now expects India’s GDP to grow at 7% for FY23 as compared to the 7.3% it had estimated earlier. CRISIL estimates mirror S&amp;P’s – as it lowered from 7.3% to 7% – but over a week ahead of S&amp;P. CRISIL also expects FY24 growth to slow down further to 6%. Giving an early view of India’s pace of growth is export data. Hit by a global slowdown, Indian exports for the month of October shrunk by 16.6% to $29.78 billion as compared to last year, according to the Commerce Ministry. Imports grew by 5.5%, widening India’s trade deficit. Goldman Sachs believes 2023 will be tougher Goldman Sachs, which provides estimates for calendar years as opposed to fiscal years, which believes the pace of growth will slowdown in 2023. A couple of weeks back, it slashed GDP growth expectations to 5.9% next year, as compared to the 6.9% growth of 2022. India’s growth momentum will be affected by the fading effects of post-Covid reopening, coupled with higher borrowing costs, as per Goldman Sachs. “Growth will likely be a tale of two halves, with a slower first half as the reopening boost fades, and monetary tightening weighs on domestic demand. In the second half, growth is likely to re-accelerate as global growth recovers, drag from net exports diminishes, and investment cycle picks up,” said Goldman Sachs per a <a href="https://economictimes.indiatimes.com/news/economy/indicators/goldman-sachs-slashes-indias-gdp-forecast-for-2023-to-5-9/articleshow/95651040.cms">Bloomberg report</a>. Goldman Sachs expects the <keyword id="11929899" type="General" weightage="20" keywordseo="global-economy" source="Orion">global economy</keyword> to grow at 1.8%, as US resilience contrasts with a European recession, and a bumpy reopening in China. “Global growth slowed through 2022 on a diminishing reopening boost, fiscal and monetary tightening, China’s Covid restrictions and property slump, and the Russia-Ukraine war,” said a redacted version of Goldman Sachs report on November 16. In the second week of November, Moody’s too cut its <keyword id="162607" type="General" weightage="20" keywordseo="india-gdp-growth" source="Orion">India GDP growth</keyword> forecast for 2022 to 7% from its earlier estimates of 7.7%. The <a href="https://economictimes.indiatimes.com/news/economy/indicators/moodys-cuts-2022-growth-forecast-for-india-to-7/articleshow/95445091.cms">rating agency has cited rising inflation</a> coupled with high interest rates and a slowing global economy as the reasons behind the same. However, Moody’s pegged India’s GDP growth rate at 4.8% for 2023 – much lower than that of Goldman Sachs’ report. SEE ALSO <a href="https://www.businessinsider.in/india/news/exports-shrink-by-16-6-to-29-78-bn-in-oct/articleshow/95532058.cms">Exports shrink by 16.6% to $29.78 bn in Oct</a> <a href="https://www.businessinsider.in/india/news/sp-cuts-indias-growth-forecast-to-7-for-fy23/articleshow/95821441.cms">S&amp;P cuts India's growth forecast to 7% for FY23</a>

No end to downgrades in GDP estimates as economists remain divided on severity of slowdown

<ul><li>India’s <keyword id="44910" type="General" weightage="20" keywordseo="gdp-growth" source="Orion">GDP growth</keyword> for the April-June quarter came below estimates at 13.5% percent.</li><li>Rating agencies have trimmed their annual growth rate projections after the quarterly data was released by the government.</li><li>"We strongly believe that the estimation of manufacturing sector growth needs serious introspection in the sense that IIP is still indexed at 2012 base,” said SBI Ecowrap.</li><li>Analysts are worried that organizations may not go through with all the capex plans that they have announced.</li></ul>The GDP growth rate for the April-June quarter which came in at 13.5%, fell short of expectations. As a result, rating agencies already lowered their annual estimates, yet again. Most of the forecasts now believe that Indian GDP will grow at 7% or below. The Reserve Bank of India however believes that it will grow at 7.2%. SBI Ecowrap trimmed its estimates as it had expected April-June GDP to grow at 15.7%. "We strongly believe that the estimation of manufacturing sector growth needs serious introspection in the sense that IIP is still indexed at 2012 base," the report said. In addition to SBI Ecowrap, Citibank and Goldman Sachs too trimmed their projections. “Rising interest rates, uneven distribution of monsoons and slowing global growth will dampen economic momentum,” said Moody’s yesterday. It cut calendar year 2023 growth rate projections to 5.2%. This is the second round of trimming by agencies after seven of them slashed their growth rate projections after the Jan-Mar quarter data was released by the government. New set of downgrades <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Institution </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">GDP forecast cut FY23 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Earlier projection </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">SBI </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">6.8% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.5% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Citibank </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">6.7% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">8% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Goldman Sachs </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.2% </td></tr></tbody></table> A lot has changed since the beginning of the year as many agencies hoped that <keyword id="113229" type="General" weightage="20" keywordseo="india-gdp" source="Orion">India GDP</keyword> growth would be above 7%. A big jolt to this belief came this May itself when the following projections have been trimmed. Downgrades after Jan-Mar quarter GDP data release <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Institution </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">GDP forecast cut FY23 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Earlier projection </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Moody’s </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">5.2% (Calendar year 2023) </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">5.4% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">YES Bank </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">6.9% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">International Monetary Fund (IMF) </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.4% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">8.2% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Nomura </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">4.7% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">5.4% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FICCI </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.4% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Asian Development Bank </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.2% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.5% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">CRISIL </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.3% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7.8% </td></tr></tbody></table> High inflation rate is worrying most analysts. “Growth challenges are likely to remain in FY23 and the K-shaped recovery is expected to continue. While many remain hopeful of a recovery in private sector capex, we remain skeptical as recent RBI data indicates that even as the number of projects announced for FY23 are higher than the previous year, the expected cumulative spend remains lower than the pre-pandemic levels,” said a report by YES Bank on August 31. Most analysts are worried that organizations may not go through with all the high capex plans that they have announced. They maintain a bias towards more downward revisions unless domestic inflation moderates or global commodity prices cool meaningfully. “Overall, it confirms that growth recovery is not so strong in India. It ideally implies that monetary tightening should not be very aggressive. However, it appears that the terminal repo rate will be 5.75-6% in this cycle with one or two more rate hikes, ending the cycle in December 2022,” said Nikhil Gupta, chief economist at Motilal Oswal Financial Services group. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/india/news/laxman-narasimhan-named-as-the-ceo-of-coffee-chain-starbucks/articleshow/93939910.cms">Laxman Narasimhan named as the CEO of coffee chain Starbucks</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/corporates/news/recession-in-the-us-may-cool-off-attrition-in-it-sector-along-with-revenues/articleshow/93942471.cms">Recession in the US may cool off attrition in IT sector along with revenues</a>

You Searched For "Crisil forecast" and got 12 results

Indian exports show resilience amid global challenges in first quarter, says CRISIL report

ANI

India's footwear, textile exports vulnerable to global slowdown: Crisil

ANI

CRISIL forecasts bank credit growth will plummet to 1% with the economic fallout COVID-19

PTI

India's GDP growth forecast continues to see cuts

Katya Naidu

RBI cuts FY23 GDP growth forecast to 7% as developed world heads into recession

Malini

Bhakti

Crisil slashes FY'20 growth forecast to 5.1 per cent

PTI

Crisil cuts FY21 growth estimate sharply to 3.5 pc

PTI

Budget measures too long term, unlikely to meet growth targets in FY21: Crisil

PTI

Diamond polishing industry caught between lab grown rocks and economic slowdown

BI India Bureau

India's GDP growth comes in at 6.3% in Q2: manufacturing, mining witness negative growth

Katya Naidu

No end to downgrades in GDP estimates as economists remain divided on severity of slowdown

Katya Naidu

Rating agencies revise GDP growth estimates yet again, most now peg it below 7%

Bhakti Makwana

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