Light Rain
14°CSun :Rain. High: 12 Low: 12

HSBC cuts FY14 growth forecast to 4% from 5.5%

HSBC cuts FY14 growth forecast to 4% from 5.5%

New Delhi: HSBC on Monday lowered India’s GDP forecast for the current financial year to 4 percent from 5.5 percent earlier saying economic uncertainty is likely to weigh on the growth forecast in the coming months.

According to the global financial services major, growth is likely to slow in the near term due to tighter financial conditions and higher macroeconomic uncertainty.

“In light of this, we revise down our GDP growth forecasts to 4.0 percent (5.5 percent) for FY2014 and to 5.5 percent (from 6.6 percent) for FY2015,” HSBC said in a research note today.

According to official figures, the country’s economic growth in the April-June quarter slid to 4.4 percent, the lowest in past several years, pulled down by drop in mining and manufacturing output.

This prompted the industry to demand co-ordinated action by the government and the RBI to boost the economy.

HSBC, however, believes the slowdown has further to go, saying leading indicators suggest the country’s growth momentum could ease further during the July-September quarter in both manufacturing and services sector.

Moreover, factors like RBI’s currency stabilisation measures and heightened macroeconomic uncertainty is making consumers and businesses more cautious about spending, HSBC said.

The pressure on growth momentum is likely to pose greater challenges for policy makers as they try to stabilise the falling currency, which had touched an all time low of 68.80 to dollar on August 28 and is currently hovering around the 66/USD mark in a highly volatile trade.

“In terms of the quarterly profile, we expect growth to slow in the July-September quarter of 2013 and dip below 4 percent,” HSBC said adding that growth will show “faint” signs of recovery during the final quarter of the fiscal year as macroeconomic uncertainties recede somewhat and confidence reluctantly recovers.

Moreover, CCI expedited and other investment projects are likely to slowly kick in around that time, the report said.

According to HSBC, “the outlook for India is still tainted with downside risks given the lingering macroeconomic uncertainties and the possibility that politics could get in the way of meaningful progress on structural reform”.

 

Top Stories

IV_34_1

Sania Mirza may play IPTL singles

November-21-2014
Mumbai: After a completely remunerating year where she won her lady World Tour Finals to add to her US Open blended pairs
happyending

Happy Ending Movie Review

November-21-2014
It is never an especially decent thought to wed a Happy Ending to a rash of remaining details, however the come about
anushka

Kohli affirms relationship with Anushka

November-21-2014
Kohli said it was at that point clear that he and Anushka were seeing someone individuals ought not be interested about them
285653-red-beacon

SP leaders grumble against utilization of red signal by Congress MLA

November-21-2014
A gathering of nearby Samajawadi Party pioneers on Thursday submitted a grievance letter with the police against Congress pioneer and Mathura MLA
jaitley_hnd1

Jaitley Tells Bankers to act Professionally

November-21-2014
NEW DELHI: Finance Minister Arun Jaitley on Thursday met heads of open segment banks to talk about approaches to cut down climbing
Ranjit Sinha_CBI_PTI

2G Scam: Former CBI chiefs take a stand in opposition to Ranjit Sinha

November-21-2014
NEW DELHI: Even as CBI executive Ranjit Sinha asserted on Thursday that he didn’t name any officer as “mole” and that he