According to a Reuters poll, India’s economic growth in the period of October to December increased. This was after there was one of the “weakest expansion” during the last six year in the “previous quarter.” The poll also showed that in the rural demand, there has been a little rebound.
A Reuters Poll found out that the gross domestic product in the last quarter of 2019, rose to 4.7% from 4.5% during the previous quarter.
Reuters mentioned that in the poll a forecast of growth during the October-December quarter has been done by almost 90% of the economists.
Economists from Barclays (a multinational investment bank in the UK), mentioned in their weekly report that factors such as improvement in the agricultural sector along with “normalization in weather conditions” followed by higher spending by the government, resulted in pushing its growth higher.
Despite this, the inflation in the month of January which increased to 7.59%, might harm the growth.
There have been certain considerations by the Reserve Bank of India to do more cuts on interest rates which will help to “prop up economic growth.” The move will be taken after the inflation becomes moderate.
For the fiscal year 2019-2020, the National Statistics Office decided to reduce its projection of growth from 6.1% to 5.0%. Sakshi Gupta who is a senior Indian economist from the HDFC Bank mentioned that the situation isn’t looking optimistic if one sees the “sequential momentum for growth.”
Despite this, so far, in a Reuters poll which was held last month, 42 economists, did expect that the growth will increase within six months.
The recent government budget mainly revolved around tax cuts and farm spending, certain economists highlight that “this was not enough, placing the burden on monetary policy” to improve the scenario.