The Indian economy likely expanded at its slowest pace in more than five years in the April-June quarter, driven by weak investment growth and sluggish demand, economists polled by Reuters said. That would reinforce concerns seen in the minutes from the Reserve Bank of India's August meeting, which showed policymakers were worried about weak growth and indicated further rate cuts in the next few months to boost the slowing economy.

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The poll median showed the Indian economy was expected to have grown at a year-on-year pace of 5.7 percent in the June quarter, a touch slower than 5.8 percent in the preceding three months. But a large minority - about 40 percent of nearly 65 economists - expect an expansion of 5.6 percent or lower.

The government will release Q1 GDP data on Friday after 5.30 PM.

Here's what the central bank, major brokerage houses and rating agencies expect:

Economic Survey

The economic survey, prepared by chief economic adviser Krishnamurthy Subramanian, which was tabled in the Parliament by finance minister Nirmala Sitharaman, has predicted 7 percent GDP growth in the financial year 2020.

The economic survey report mentioned stable macroeconomic conditions as the reason behind the higher growth forecast for this fiscal. Huge political mandate augurs well for growth prospects, it noted.

The report said that the crisis in the NBFC sector has been a reason for a growth slowdown in the financial year 2019. The country's GDP growth has averaged a high 7.5 percent in the last five years, the economic survey report added.

Reserve Bank of India

The Reserve Bank of India (RBI) in its August ) Monetary Policy Committee (MPC) slashed the country's GDP growth rate to 6.9 percent from its earlier revised projection of 7 percent. In its June monetary policy, the MPC revised GDP growth rate projection to 7 percent from 7.2 percent.

RBI said risks for the financial year 2019-20 have tilted the GDP growth forecast to the downside. RBI said the GDP growth rate projection for the first half of current fiscal year stands between 5.8 percent and 6.6 percent as against 6.4 percent and 6.7 percent earlier while that of the second of the year stands between 7.3 percent and 7.5 percent.

CLSA

The first-quarter gross domestic product data will likely confirm expectations of sluggish growth as monthly indicators have already signaled weak domestic demand trends going into the second quarter as well, according to a CLSA report.

The brokerage said Q1 gross value added (GVA) growth, which has been 0.2-0.3 percentage points (ppt) lower than the GDP in the last three years, is expected to be not much above the 5.7 percent in the last quarter.

India Ratings

India Ratings on Wednesday lowered the country's growth forecast to six-year low of 6.7 percent for the current fiscal from an earlier estimate of 7.3 percent on account of slowdown in consumption and moderation in industrial growth among other factors.

This would be the third consecutive year of subdued growth, India Ratings principal economist Sunil Kumar Sinha said here.

Even on a quarterly basis, he said, April-June is expected to be the fifth consecutive quarter of declining GDP growth at 5.7 percent.

Moody's Investor Services

The rating agency revised downwards India's GDP growth forecast for the current year to 6.2 percent, saying the economy remains sluggish due to a combination of factors such as weak hiring, distress among rural households and tighter financial conditions.

The GDP growth forecast for 2019 calendar year was revised downwards from its previous estimation of 6.8 percent.

Nomura

India's economic growth is set to slow further in the April-June quarter of this year to 5.7 percent amid a contraction in consumption, weak investments and an under-performing service sector, says a Nomura report. According to the global financial services major, even though growth is set to slow further in Q2 (April-June) the economy is expected to see some recovery in the July-September quarter.

"High-frequency indicators continue to show familiar pain points a deep contraction in consumption, weak investment, a slowing external sector and an under-performing services sector," Nomura said in a research note.

ANZ

Australia and New Zealand Banking Group (ANZ) slashed its forecast for India's economic growth to 6.2 percent in the financial year ending next March from a previous estimate of 6.5 percent, warning it would be tough for authorities to engineer a turnaround.

The bank's estimate of gross domestic product (GDP) growth is now well below the expectations of other banks, and a long way from the Reserve Bank of India's (RBI) forecast of 6.9 percent forecast, which itself was cut from 7.0 percent this month.

CRISIL

Global analytical firm CRISIL has cut India's GDP growth forecast for this fiscal by 20 basis points to 6.9 percent citing weak monsoon, slowing global growth, and sluggish high-frequency data for the first quarter.

The firm, in its latest report on the outlook for India in the financial year 2019 titled ‘Uphill trek’, has said that while the slowdown would be significant in the first half of this fiscal, the second half is expected to find support from expected monetary easing, consumption, and statistical low-base effect.

UBS

Swiss brokerage UBS has lowered the country's real GDP growth forecast to 6.7 percent from 6.9 percent earlier in FY20 citing the continuing slowdown in consumption demand and warned that a revival is unlikely before FY21.

"We expect real GDP growth to remain sluggish in FY20 as well after slowing to a five-year low of 6.8 percent in FY19. We are lowering our FY20 forecast further to 6.7 from 6.9 percent," UBS India economist Tanvee Gupta Jain, said in the report Wednesday.

First Published:Aug 29, 2019 3:04 PM IST