Millennium Post

HSBC cuts India’s growth forecast to 5.7% for this fiscal

HSBC has cut India’s growth forecast for this fiscal year to 5.7 per cent from 6.2 per cent projected earlier, citing lack of ‘reform traction’ in the country and weak global economic backdrop.

HSBC said following the disappointing monsoon session in Parliament, there is less hope for a ‘meaningful’ progress on structural reforms in the near term.

Besides, the below normal monsoon is likely to affect the GDP growth of October-December quarter, while weak global economic scenario is likely to impact the economy through trade, finance and confidence channels, it said. ‘We have revised down our growth forecast for 2012-13 to 5.7 per cent (as against 6.2 per cent previously) and for financial year 2013-14 to 6.9 per cent (from 7.4 per cent previously),’ HSBC said in a research report.

Earlier this month, Morgan Stanley had lowered India’s growth forecast to 5.1 per cent for FY13.


The Centre for Monitoring Indian Economy (CMIE) revised the country’s economic growth estimate for the current fiscal downwards to 6.3 per cent on concerns from both the manufacturing and services sectors.

‘We expect real GDP to grow by 6.3 per cent during 2012-13. This is a downward revision from our previous forecast of 6.7 per cent growth,’ CMIE said in its monthly review of the Indian economy released here.

A change in forecast for manufacturing sector and the consequent fall in the growth of the services sector prompted the revision, the think-tank said.

Government data released last month said India’s economy grew 5.5 per cent during the first quarter ended June.

The city-based research outfit joins a growing list of rating agencies and economists who believe GDP growth of Asia’s third-largest economy will slip in the current fiscal.

The RBI has revised growth projection down to 6.5 per cent while the Prime Minister’s Economic Advisory Council’s latest report has pegged it at 6.7 per cent.
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