Fitch group firm India Ratings and Research (Ind-Ra) has said Indian economy may have slowed to 4.7% in second quarter of current financial year (Q2FY20). The 4.7% projection for the second quarter of the current fiscal would mark six consecutive quarters of slowing growth. The Indian economy expanded 5% in April-June, its slowest annual pace since 2013.
This comes despite a recent series of fiscal stimulus, including reduction in corporate tax rates. The measures were taken by the government to arrest the growth slowdown. In September, it announced a cut in the corporate tax rate to 22% from 30%. It also lowered the tax rate for new manufacturing companies to 15% to attract fresh foreign direct investments.
It has revised its GDP growth forecast for FY20 to 5.6%. This is the fourth revision and has come in after the agency had revised its FY20 GDP growth forecast only a month ago to 6.1%. The revision became inevitable as the high-frequency data now suggests that the agency’s estimate of 2QFY20 GDP growth coming in a little higher than 5% is unlikely to hold.