India: Growth setback - ANZ

According to analysts at ANZ, the change in high-frequency indicators now vis-à-vis six months ago for the Indian economy are pointing to broad-based weakness in the economy, warranting a downgrade to their growth forecasts.

Key Quotes

“We have thus revised lower our GDP growth forecast to 6.9% for FY19 (ending March 2019) and 6.8% for FY20 (from 7.0% and 7.1%, previously). For Q4 FY19, we estimate GDP growth to slow to 6.2% y/y compared with 6.6% in the previous quarter.”

“At the component level, general economic activity and consumption related indicators have materially weakened whereas investment-related indicators are holding up relatively better.”

“We believe that a broad-based response both from policy rate cuts and a further easing of liquidity conditions is essential to stem this slowdown.”