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EIU predicts another quarter of lacklustre growth

EIU predicts another quarter of lacklustre growth

New Delhi: The economic performance across G7 nations and leading emerging markets is expected to be muted in Q4 of 2019 owing to global trade tensions and sharp deceleration in real GDP growth in the US, China and India, The EIU said in a report on Wednesday.

The report forecasts that the real GDP grew by 1.6 per cent quarter-on-quarter in India, but noted that this uptick was largely owing to base effect.

"... this apparently strong headline figure was artificially boosted by the dismal performance of the Indian economy in the previous quarter amid weak consumer sentiment and tepid investment," the report said.

The report, however, noted that series of government stimulus measures and a low interest rate environment are likely to spur demand and investment in 2020.

Following which a rebound in full-year real GDP growth, to 6.1 per cent (up from an estimated 4.9 per cent in 2019) is likely, it added.

According to The EIU, on a year-on-year basis, India's real GDP growth for the October-December 2019 period stood at 4.6 per cent, and for the January-March quarter of 2020 it was 5.5 per cent.

For China, the world's second-largest economy, the report forecasts up to 1.5 per cent growth pick-up in the fourth quarter of 2019, from 1.3 per cent in the third quarter, as the conclusion of a first-phase of US-China trade deal at the end of last year helped to alleviate part of the uncertainty that businesses and consumers were facing.

In Asia, India recorded, the best rate of quarterly growth in October-December, while Japan had the worst, as per the report.

The EIU team forecasts weak fourth-quarter economic performance across the G7 and BRICS countries, owing to the combined effect of global trade tensions and sharp deceleration in real GDP growth in the US, China and India.

According to the Economist Intelligence Unit's (The EIU) Q4 Global Forecast, factors like global trade tensions, renewed volatility in emerging markets; and political uncertainty in a number of EU countries were also responsible for the sluggish growth rate.

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