India's GDP to see slowest growth in Q3 FY19? Here's what economists say

Illustration by Ajay Mohanty
Continuing with its downward growth momentum, the Indian economy is set to witness its slowest pace of growth in 2018 during the October-December quarter, according to Reuters. 

A Reuters poll of 55 economists has forecast the gross domestic product (GDP) growth rate of 6.9 per cent. This is a tad below the 7.1 per cent GDP growth seen in the July-September period. 

Business Standard also reported on Monday that the GDP rate will likely be in the range of 6.7 per cent and 6.9 per cent. 

Only Ernst and Young India has predicted a high growth rate between 7.3-7.4 per cent. Data for FY19 growth rate, along with second advance estimates, is set to be released by Central Statistics Office on Thursday. The government had earlier revised the GDP growth rate from 6.7 per cent to 7.2 per cent 

Gross value added growth (GVA) is expected to be 6.7 per cent in the Q3 quarter, marginally down from 6.9 per cent in the previous three months, according to Reuters.

Why do economists forecast lower growth? 

Farm distress coupled with weak rural incomes and low urban demand are the main drivers of a lower growth forecast, that too in an election year. The Reserve Bank of India's rate cut earlier this month and its sudden 'dovish' turn also attributed to the lower projection. 

Besides global uncertainty over trade conflicts, Brexit and oil prices could also weigh on India's growth trajectory. 

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel