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- Global rating agency Fitch has cut its India’s Gross domestic product(GDP) growth forecast to 6.8% for 2019-20 from the earlier estimate of 7%.It was cut due to weak momentum in manufacturing and agriculture.However,it said India’s economic growth is expected to be 7.1% in 2020-21.
- The weak momentum has been due to (a)credit availability has tightened up in areas heavily dependent on non-bank financial company(NBFC) credit like autos and two-wheelers where sales have dropped and (b)food inflation has been muted and fell into negative territory weighing on farmers incomes. However, capital infusion and a looser regulatory stance of the Reserve Bank of India (RBI) have eased the state banks capital constraints.
- Fitch has also cut its global economic forecasts for 2019.It projected growth forecast for 2019 at 2.8% from 3.1% projected earlier.However,it retained China’s growth projections at 6.6% in 2018 and 6.1% in 2019.
- Gross domestic product (GDP) is the monetary value of all the finished goods and services produced within a country’s borders in a specific time period.GDP includes (a)all private and public consumption (b) government outlays (c)investments (d)private inventories (e)paid-in construction costs and the (f)foreign balance of trade(exports are added,imports are subtracted).
- Fitch Ratings is an international credit rating agency based out of New York City and London.It is a leading provider of credit ratings, commentary and research.Along with Moody’s and Standard & Poor’s, Fitch is one of the top three credit rating agencies
