Morgan Stanley, on the other hand, sees global GDP growth in CY20 at 3.2 per cent and 3.5 per cent in CY21. Those at CLSA peg 2019 global growth at 2.2 per cent, down from 2.9 per cent in the previous year and expect it to reach 1 per cent in 2020 before bouncing back to 2.2 per cent in 2021.
Bloomberg Economics’ global GDP tracker shows the pace of expansion has slowed to 2.4 per cent in the third quarter of 2019, down from 4.7 per cent at the start of 2018.
“Since the start of 2018, we have seen the longest period of a downgrade to GDP growth. But there does seem to be light at the end of the tunnel. Purchasing Manager Indexes (PMIs) have bounced a little from their recent lows having been at the top end of their range in January 2018,” wrote Andrew Garthwaite, managing director and global equity strategist at Credit Suisse in a recent co-authored report.
Despite the optimism surrounding the likely pick-up in the global economy, most economists remain cautious on the road ahead for India after the recent GDP print of 4.5 per cent for the second quarter (Q2) of the current fiscal (FY20).
Analysts at Nomura, for instance, expect the GDP to remain sub-par until mid-2020 with an improvement (above 6 per cent) only in the third quarter of 2020 (Q3-2020). “We believe the current risks prolonging the balance sheet deleveraging cycle, postponing the private investment cycle recovery, and thereby further hurting India’s potential growth,” wrote Sonal Varma, managing director and chief India economist at Nomura in a co-authored report with Aurodeep Nandi.
Those at CARE Ratings, too, expect the pick-up to gradual and spread out over the next two – three years given that the problems are structural in nature. “While optically the number can be around 5.5 per cent to 6 per cent in 2020, a meaningful pick-up that can take the GDP around the 8 per cent mark is still a two – three years away,” says Madan Sabnavis, chief economist at CARE Ratings.
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