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In a rather dampened <keyword id="19915531" type="General" weightage="20" keywordseo="forecast" source="keywords">forecast</keyword> for the Indian economy, <keyword id="19908266" type="General" weightage="20" keywordseo="ICRA" source="keywords" meta.keywordsubtype="org" meta.entityname="ICRA" meta.hostid="261" meta.entityid="ICRA">ICRA</keyword> has forecast a sharp <keyword id="20637625" type="General" weightage="20" keywordseo="slowdown" source="keywords">slowdown</keyword> in India's <keyword id="19972825" type="General" weightage="20" keywordseo="GDP-growth" source="keywords">GDP growth</keyword>. The credit rating agency has projected a year-on-year expansion of 6.0% in <keyword id="22106354" type="General" weightage="20" keywordseo="Q1-FY2025" source="keywords">Q1 FY2025</keyword> — the lowest in the last six quarters. In Q4 FY2024, India recorded an impressive 7.8%. The Reserve Bank of India had expected the growth momentum to continue this financial year as well. Earlier this month, the RBI governor had projected a 7.1% growth in Q1, while the growth rate for the entire financial year FY2024-25 was projected to be at 7.2%. The central bank had attributed this potential robust growth to improved agricultural activity, sustained buoyancy in services activity, healthy balance sheets of banks and corporates, thrust on capex by the government, visible signs of pick up in private investment, and improving prospects of global trade. However, RBI’s growth projections for this financial year were slightly moderated due to lower-than-anticipated corporate profitability, general government expenditure, and core industries output. As per ICRA, the sharp drop in GDP growth is primarily due to parliamentary elections and a contraction in government capital expenditure weakening urban consumer confidence. Another main cause could be the weakening urban consumer confidence, which reported a surprising downtick in the May and July 2024 rounds of the Central Bank’s Consumer Confidence Survey. “The lingering impact of last year’s unfavourable monsoon and an uneven start to the 2024 monsoon prevented a broader improvement in rural sentiment. Lower volume growth combined with diminishing gains from commodity prices weighed upon the profitability of some of the industrial sectors. The heat wave also affected footfalls in various service sectors, even as it provided a significant boost to electricity demand,” said Aditi Nayar, Chief Economist at ICRA. Despite the Q1 slowdown, ICRA expects economic activity to pick up in the latter half of FY2025, projecting an overall GDP growth of 6.8% for the full year, with a potential to exceed 7% in the second half. The agency expects decelerated growth in Gross Value Added (GVA) as well, easing to 5.7% in Q1 FY2025 from 6.3% in the previous quarter. This slowdown is primarily attributed to a decline in industrial growth, which is predicted to moderate to 6.4% from 8.4%, along with slight reductions in the services sector's growth and a modest improvement in agricultural GVA. The difference between GDP and GVA growth is expected to narrow to around 30 basis points (bps) in Q1 FY2025, down from 148 bps in the previous quarter, due to lower growth in net indirect taxes amid a rise in government subsidies. ICRA's analysis indicates that industrial GVA growth is likely to moderate in Q1 FY2025, with a slowdown in manufacturing and construction offset by growth in electricity, mining, and quarrying. Additionally, a contraction in government and state capital expenditure, along with a significant drop in new project announcements, has contributed to the overall slowdown. Manufacturing profit margins have also been under pressure due to rising global commodity prices and narrowing deflation in input costs, which, combined with slower growth in manufacturing output, suggests a deceleration in manufacturing GVA growth. In the agricultural sector, GVA growth is projected to be modest at 1.0% in Q1 FY2025, amidst declining output from most rabi and summer crops and a deficient rainfall in June 2024. With growing concerns around inflation and unemployment in India and across the world, the latest forecast could further fuel the fears around recession and slowdown in major economies. However, a much clearer picture will emerge with the actual quarterly estimates of GDP for Q1 from the National Statistical Office (NSO) next week. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/digital-initiatives-to-triple-indian-retail-borrowing-to-usd-2-5-trillion-by-2030-sp-global/articleshow/112263945.cms" data-type="tilCustomLink" target="_blank">Digital initiatives to triple Indian retail borrowing to USD 2.5 trillion by 2030: S&amp;P Global</a>

ICRA forecasts slowdown in India's economy: GDP growth expected to hit six-quarter low in Q1 FY2025

<ul><li>The hospitality sector saw 23 <keyword id="142429" type="General" weightage="20" keywordseo="credit-rating" source="Orion">credit rating</keyword> upgrades, with no downgrades at all in FY24, says ICRA.</li><li>Auto, financial sector, power, realty and transport infrastructure also saw several upgrades.</li><li>Agriculture, chemicals, construction and apparel sectors saw the most downgrades. </li></ul> The fiscal year of FY24 continued the ‘upgrade momentum’ that was set into motion in FY22, said the credit rating agency ICRA. Two entities had been upgraded for every entity downgraded during the year, the rating agency said in a report released on Monday. The biggest winner for the year is the hospitality sector — with 23 upgrades and an upgrade rate of 37%. And, there were no downgrades at all. ICRA maintains a positive outlook on the Hospitality sector for FY2025 as well. The other sectors which saw the most number of upgrades include auto and auto components, finance, power, realty and transport infrastructure. On the other hand, sectors which saw the most number of downgrades are — agricultural food and other products, chemicals and petrochemicals, construction, textiles and apparel. Company-specific factors While entities in aviation, hospitality, auto &amp; auto components, and banks gained from the industry tailwinds in FY24 – that’s not the only factor behind most upgrades. “A large majority of rating upgrades were driven by company-specific factors such as expansion in market share or order book, improvement in the cost structure, reduction in project risk, or fresh equity infusion that strengthened the balance sheet,” says K Ravichandran, chief rating officer at ICRA said. Overall, credit profiles continued to improve last year. The number of instances of defaults dipped to five in FY24, compared with 22 in FY23 and 42 in FY22. “Corporate India has shown a high resilience to withstanding the rise in borrowing costs over the past two years and is seen to have the capacity to bear the current level of interest rates before the rate cut cycle likely begins in the latter part of the year,” said Ravichandran. Banks &amp; NBFC asset profiles at decadal best The financial sector has also been one of the best-performing sectors for the year in terms of credit profile. It saw an upgrade rate of 13%, next only to auto. Its downgrade ratio is also low at 2%. “The asset quality of banks and NBFCs has also been at its decadal best with the profitability and the capitalisation indicators expected to remain healthy in the near term. The series of proactive actions taken by the regulators (RBI and SEBI) in recent years would work to further strengthen the financial system and the capital markets,” opines Ravichandran. He, however, added that the key downside factors that could derail progress in multiple sectors are the monsoons and complicated geopolitical landscape. Two wars, the Red Sea crisis and sluggish exports had been weighing on India in FY24. “Yet, these did not feel heavier as domestic consumption demand across several sectors, government spending on public infrastructure, and healthy balance sheets lent support to the credit profiles of entities,” says ICRA. In FY25, the rating agency expects India’s GDP to expand by 6.5%, with the average retail inflation estimated to be moderate at 4.6%.

Two entities upgraded for every downgrade in FY24, hospitality sector records 23 upgrades: ICRA

Chennai, Credit rating agency <keyword id="19908266" type="General" weightage="20" keywordseo="icra" source="keywords">ICRA</keyword> on Wednesday said <keyword id="19895063" type="General" weightage="20" keywordseo="india" source="keywords">India</keyword>'s Gross Domestic Product (GDP) would grow at 6 per cent in Q3 FY2024 from 7.6 per cent in Q2 FY2024. Further, the Gross Value Added (GVA) growth is estimated to ease to 6 per cent in Q3 FY2024 from 7.4 per cent in Q2 FY2024, driven by the industrial and agriculture sectors, amid an improvement in the services sector. According to ICRA, the anticipated deterioration in the industrial sector growth in Q3 FY2024 is partly attributable to an adverse base effect and a deceleration in volume expansion even as the continued deflation in commodity prices kept profitability of some sectors favourable. Additionally, a mild 0.2 per cent contraction in the total spending of Government of India and 25 state governments (all states except <keyword id="19915575" type="General" weightage="20" keywordseo="arunachal-pradesh" source="keywords">Arunachal Pradesh</keyword>, <keyword id="19895061" type="General" weightage="20" keywordseo="goa" source="keywords">Goa</keyword> and Manipur) in Q3 FY2024 is expected to have dulled the GVA growth in the quarter. "Lower volume growth for the industrial sector, flagging momentum in certain indicators of investment activity, a slowdown in Government expenditure and an uneven monsoon are expected to dampen the GDP growth to 6.0 per cent in Q3 FY2024 from 7.6 per cent in Q2 FY2024," <keyword id="20028743" type="General" weightage="20" keywordseo="aditi-nayar" source="keywords">Aditi Nayar</keyword>, Chief Economist, Head-Research &amp; Outreachs said. ICRA estimates the industrial GVA growth to record a broad-based moderation to 8.8 per cent in Q3 FY2024 from 13.2 per cent in Q2 FY2024, led by all four sub-sectors, namely, manufacturing, electricity, construction and mining and quarrying. ICRA projects manufacturing GVA expansion at a healthy 10 per cent in Q3 FY2024, twice as high as the 4.7 per cent seen in Q1 FY2024, albeit lower than the 13.9 per cent recorded in Q2 FY2024, amid a deceleration in volume growth as reflected in the manufacturing Index of Industrial Production (IIP). Owing to the decline in output across all major kharif crops projected by the First Advance Estimates, ICRA projects the growth in agriculture, forestry, and fishing to dip to a muted 0.5 per cent in Q3 FY2024 from 1.2 per cent in Q2 FY2024. This would be the lowest growth print for the sector since Q4 FY2019 (-0.9 per cent). In contrast to industry and agriculture, ICRA estimates the services GVA YoY growth to rise to 6.5 per cent in Q3 FY2024 from 5.8 per cent in Q2 FY2024, led by trade, hotels, transport, communication and services related to broadcasting.

India's FY24 third quarter GDP growth seen at 6%: ICRA

New Delhi, The government's fiscal deficit at Rs 11 lakh crore at January end touched 63.6 per cent of the revised annual target, according to the official data released on Thursday. In the corresponding period last year, the fiscal deficit or gap between the expenditure and revenue was 67.8 per cent of Revised Estimates (RE) of the Union Budget 2022-23. For 2023-24, the government's fiscal deficit is estimated at Rs 17.35 lakh crore or 5.8 per cent of the GDP. The government's total receipts stood at Rs 22.52 lakh crore (81.7 per cent of corresponding RE 2023-24 of total receipts) as of January 2024, according to the data released by <keyword id="20408086" type="General" weightage="20" keywordseo="controller-general-of-accounts" source="keywords">Controller General of Accounts</keyword> (<keyword id="20408087" type="General" weightage="20" keywordseo="cga" source="keywords">CGA</keyword>). This comprised Rs 18.8 lakh crore tax revenue (net), Rs 3.38 lakh crore of non-tax revenue and Rs 34,219 crore of non-debt capital receipts. Non-debt capital receipts consist of the recovery of loans and miscellaneous capital receipts. The total expenditure incurred by the Centre was Rs 33.54 lakh crore (74.7 per cent of corresponding RE 2023-24), out of which Rs 26.33 lakh crore is on revenue account and Rs 7.2 lakh crore on capital account. As per the CGA data, Rs 8,20,250 crore has been transferred to state governments as devolution of share of taxes by the central government up to this period, which is Rs 1,52,480 crore higher than the previous year. Out of the total revenue expenditure, Rs 8,21,731 crore was on account of interest payments and Rs 3,15,559 crore on major subsidies. Commenting on the data, <keyword id="20028743" type="General" weightage="20" keywordseo="aditi-nayar" source="keywords">Aditi Nayar</keyword>, Chief Economist, <keyword id="19908266" type="General" weightage="20" keywordseo="icra" source="keywords">ICRA</keyword>, said: "While there may be some slippage in the disinvestment target and capex may trail the FY2024 RE, ICRA does not expect the revised fiscal deficit target of Rs 17.3 lakh crore for FY2024 to be breached." The Prime Minister Narendra Modi-led government in the interim Budget refrained from announcing populist measures, which is expected to help it trim the fiscal deficit to 5.1 per cent of the GDP next fiscal and 4.5 per cent in FY26. The nominal GDP growth for the next financial year has been pegged at 10.5 per cent against the 11 per cent estimated earlier. The nominal GDP as per budget estimate 2024-25 has been projected at Rs 3,27,71,808 crore, assuming 10.5 per cent growth over the estimated nominal GDP of Rs 2,96,57,745 crore, as per the First Advance Estimates of FY2023-24. Helped by an improvement in tax buoyancy, the government managed to achieve a fiscal deficit of 5.8 per cent against the budget estimate of 5.9 per cent for the current financial year.

Fiscal deficit at Jan-end touches 63.6% of full year target: Govt data

<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>The on-book portfolio stood at ₹12.7 lakh crore at the end of June 2022, up from ₹11 lakh crore in the previous year.</li><li>The high growth in Q1 was due to moderate growth in the same period last year, <keyword id="6354972" type="General" weightage="100" keywordseo="icra" source="Orion">ICRA</keyword> said.</li><li>The ratings agency pegs the full-year portfolio growth between 10-12%.</li><li>ICRA also said that asset quality also witnessed an improvement during Q1 FY23.</li></ul><keyword id="100080" type="General" weightage="20" keywordseo="Housing-finance" source="Orion">Housing finance</keyword> companies have clocked a 15% year-on-year growth in their on-book portfolio in Q1 FY23, according to credit rating agency ICRA. However, the high growth in Q1 was due to moderate growth in the same period last year, the ratings agency said. Overall, housing finance companies’ on-book portfolio stood at ₹12.7 lakh crore at the end of June 2022, up from ₹11 lakh crore a year ago. “The growth was driven by the healthy demand in the industry and the increasing level of economic activity. Going forward, demand is expected to remain firm,” said Sachin Sachdeva, VP and sector head - financial sector ratings, ICRA, while retaining growth and asset quality estimates for FY23. However, the boost from the low base effect in Q1, combined with the rising interest rates, could result in a slightly lower pace of growth in FY23 than Q1 – the ratings agency pegs the full-year growth between 10-12%. According to a Livemint <a href="https://www.livemint.com/market/mark-to-market/icing-on-banking-cake-may-start-melting-soon-11666806180336.html">report</a>, the weighted average increase in interest rates on fresh rupee loans from banks between April and August 2022 stood at 82 bps. The RBI has <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">increased</a> the repo rate by 190 bps so far this year in an effort to tackle rising inflation, which stood at 7.41% in September. Following the rate hikes, the current repo rate stands at 5.9%. <cmsannotation type="cmsannotation" annotationid="Asset quality improvements to continue" comment="subhead" text="Asset quality improvements to continue">Asset quality improvements to continue</cmsannotation> Housing finance companies (HFCs) have seen a moderate improvement in their asset quality during Q1 FY23. The gross non-performing assets (GNPA) ratio declined to 3.1% as of end June 2022, from 3.2% at the end of March 2022, according to the agency. The report adds that this improvement was due to two reasons – an increase in the on-book portfolio, and recovery in the non-housing segment of some large HFCs, allowing them to buck the trend of increasing GNPAs in the first quarter of a financial year. The growth in the June quarter also helped HFCs reduce their standard restructured book to 1.3% of assets under management (AUM) in end June 2022, from 1.7% in end March. Restructured standard book refers to those loans which have been restructured by a modification of the credit terms while maintaining the “standard asset” tag. “The improvement in GNPAs in Q1 FY2023 was driven by improvement in GNPAs of some large HFCs and it was not broad based. Nevertheless, ICRA expects further improvement in FY2023 and retains its GNPA estimate of 2.7-3% by March 31, 2023,” Sachdeva added. SEE ALSO: <a href="https://www.businessinsider.in/finance/news/this-is-indias-decade-and-gdp-is-likely-to-cross-7-5-trillion-by-2031-says-morgan-stanley/articleshow/95256483.cms">This is India’s decade and GDP is likely to cross $7.5 trillion by 2031, says Morgan Stanley</a> <a href="https://www.businessinsider.in/stock-market/news/indian-markets-trade-flat-despite-us-feds-75-bps-rate-hike/articleshow/95269969.cms">Indian markets trade flat despite US Fed’s 75-bps rate hike</a> <a href="https://www.businessinsider.in/entertainment/news/shark-tank-season-2-is-here-but-popular-shark-ashneer-grover-is-missing-meet-the-new-shark/slidelist/95271549.cms">Shark Tank season 2 is here but popular shark Ashneer Grover is missing – meet the new shark</a>

Housing finance companies clock 15% YoY portfolio growth in Q1, but rate hikes could moderate growth for FY23, says ICRA

<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

Mumbai, May 20 () Domestic rating agency Icra on Wednesday warned of a deep recession as it drastically lowered FY21 growth forecast for India to minus 5 per cent, citing the very modest fiscal support, extension of the nationwide lockdown and looming labour shortage. The agency also sharply revised downwards the growth contraction in Q1 to 25 per cent as against the previous forecast of 16-20 per cent and to minus 2.1 per cent in Q2 from 2.1 per cent growth previously, which implies a recession. Though the government has been claiming that its economic stimulus package is worth 10 per cent of GDP or Rs 20.9 lakh crore, analysts have pegged it at just 0.8 - 1.2 per cent of the GDP. After the two phases of the nationwide lockdown, many experts warned of a minor contraction in growth. But with the lockdown being extended to end-May, and expectation of substantial delays in getting the supply chains operational following the return of millions of migrant workers to their home states, Q1 degrowth will be deeper, and recovery will be shallower and more delayed than our earlier assessment, Icra said. "Accordingly, we now expect FY21 growth to contract by a whopping 5 percent relative to our earlier expectation of 1-2 percent," its Chief Economist Aditi Nayar and Economist Aarzoo Pahwa said in a note. Icra sees Q1 GDP contracting by 25 per cent as against previous forecast of 16-20 per cent and Q2 growth contracting by 2.1 percent from a 2.1 per cent growth expected previously. However, the economy may see a moderate 2.1 per cent growth in Q3 (against previous estimate of 3.6 per cent growth) and 5 per cent in Q4. The much-touted Rs 20.97 lakh crore package includes Rs 8.02 lakh crore monetary measures announced by the Reserve Bank since February as well as the Rs 1.93 lakh crore initially announced by the Centre and revenue foregone due to tax concessions. According to Icra, these announcements are only enabling provisions to support a recovery after the lockdown by helping the most stressed sectors get working capital credit. None of these offer to absorb their losses from the lost output for more than two months, it said. Moreover, the reforms announced will have any meaningful outcomes only with a lag of a few years. "Overall, we estimate the direct fiscal cost of this package to be limited to 1 percent of GDP, or around 10 percent of the total announcements," they said, adding these measure will not be able to counter the demand destruction caused by the pandemic, or address the prevailing supply chain infirmities. While the agency had earlier forecast a V-shaped recovery, it warned that if there is a second wave of infections and subsequent lockdowns either in India or globally, the ensuing demand uncertainty and supply chain hiccups may result in a W-shaped economic cycle. On the labour issue, it said multiple extensions of the lockdown has created uncertainty and untold misery to the poor migrant workers forcing them to flee to their villages. "With a considerable portion of their savings likely to have been used up over the last two months, we feel that they may choose to delay their return to the cities until after the festive season is over, which could affect the pace of normalisation in various economic activities, including manufacturing and construction," it added. BEN ABM ABM

Icra warns of deep recession, GDP to contract 5 pc in FY21

Mumbai, Mar 27 () Despite the Reserve Bank of India's (RBI) massive actions to spur the economy, India's gross domestic product (GDP) is likely to contract by 4.5 per cent in the April-June 2020 quarter and will rise by only 2 per cent in 2020-21 on the coronavirus impact, according to domestic rating agency Icra. While announcing a number of measures in the policy review, the RBI refrained from giving its estimate on both growth and inflation, saying things are fluid and rapidly changing. The Indian economy was already supposed to clock a decadal low growth of 5 per cent in 2019-20, according to official estimates, and the coronavirus-related worries have only compounded the problems. "Regardless of the measures announced now by the RBI, we are lowering our base case scenario for GDP growth to (-)4.5 per cent for Q1 FY2021 and to 2 per cent for FY21," Icra said in a note on Friday. They said the estimate is guided by the rapidly growing uncertainties over the duration of the impact of coronavirus on economic activity in India and the rest of the world. The RBI's policy measures got welcomed as a set of "comprehensive announcements" by the agency. "The combination of moratoriums, liquidity enhancing measures and the sharper-than-hoped-for repo rate cut will help to assuage the markets in these increasingly unsettled times, and offer some protection against widespread defaults, even though the actual impact on boosting economic activity may be limited," it said. A slew of analysts have been downwardly revising their growth estimates following the outbreak of the coronavirus pandemic in India and also a host of developed countries. India has been placed under a three-week lockdown till mid-April, which has chilled virtually all the economic activity. AA HRS

GDP likely to grow just 2 per cent in 2020-21: Icra

Mumbai, May 4 () After the government announced graded relaxations in the lockdown, domestic rating agency Icra on Monday estimated that the country's GDP might contract by as much as 20 per cent in the June quarter and is expected to overcome some lost ground in the remainder of the year but still close 2020-21 down by up to 2 per cent. The agency's earlier economic forecast was a range, according to which the GDP may either expand by 1 per cent or contract by 1 per cent in 2020-21. After keeping the country under a 40-day lockdown to arrest the spread of coronavirus, the government extended the lockdown till May 17 with a slew of relaxations to the unaffected areas in order to kick-start economic activity. "While the graded relaxations announced by the government will permit the resumption of economic activity, the relatively stringent norms in major urban centres will result in the pace of activity remaining constrained," the agency said. It said there is a likelihood of mismatches in labour availability and sectors, such as manufacturing, construction, trade, hotels and transport, will drag down growth. "Accordingly, we now expect the Indian GDP (gross domestic product) to contract by 16-20 per cent in Q1FY21 (first quarter of 2020-21), which implies that a full-year contraction of 1-2 per cent is inevitable," it said. A slew of watchers have been forecasting for a heavy impact on the already sagging growth -- India was supposed to grow at a decadal low in 2019-20 as per official estimates -- because of the COVID-19 pandemic that has chilled all activity. The government has already announced a Rs 1.7-lakh crore package to fight the COVID-19 crisis, which many feel is not sufficient. Some analysts have also said that over half of the stimulus package was already included in Budget 2020-21 announcements and is not fresh money. Even as many watchers point to the limited financial space available, there are reports that the government is working on a new package. The Reserve Bank of India (RBI) has cut the key policy rate (repo) by a steep 0.75 per cent and also taken a slew of unusual measures to make liquidity available for the needy sectors of the economy with a view to push growth. RBI Governor Shaktikanta Das has also said that meeting the 3.5 per cent fiscal deficit target will be challenging and the government may miss the budgeted target. AA HRS

You Searched For "icra gdp" and got 11 results

ICRA forecasts slowdown in India's economy: GDP growth expected to hit six-quarter low in Q1 FY2025

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Two entities upgraded for every downgrade in FY24, hospitality sector records 23 upgrades: ICRA

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Fiscal deficit at Jan-end touches 63.6% of full year target: Govt data

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

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

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Housing finance companies clock 15% YoY portfolio growth in Q1, but rate hikes could moderate growth for FY23, says ICRA

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India's GDP growth forecast continues to see cuts

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Icra warns of deep recession, GDP to contract 5 pc in FY21

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GDP likely to grow just 2 per cent in 2020-21: Icra

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Icra expects GDP to contract by 20 pc in June quarter; 2 pc fall in FY21

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