Fair
16°CSat :Partly Cloudy. High: 23 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

sensex-031

Sensex recaptures 28,000-level in evening exchange on Friday

May-22-2015
Mumbai: The benchmark BSE Sensex bounced more than 215 focuses to recapture the 28,000-level after a crevice of almost one month amid
595x382xvirat-kohli-1432195941.jpg.pagespeed.ic.K9Ah9sIh2BIT3QJcHndy

Reports: IPL player maintenance strategy to be transformed from 2017

May-22-2015
As indicated by reports, the player maintenance approach in the Indian Premier League (IPL) could be changed by the Board of Control
Zeeshan-Ali-Khan

No employment for Muslim MBA? This ought to shock no one in Modi’s India

May-22-2015
There is stun, awfulness and shock in liberal circles more than a news report that a Mumbai-based organization turned down a Muslim
Arun J1x414-YUFI

Arun Jaitley on Modi govt’s one year: ‘There’s total clarity on development way’

May-22-2015
The National Democratic Alliance (NDA) govt has introduced a situation of excitement on the financial front and it is taking choices keeping
alia-bhatt-and-varun-dhawan

Salman out, Varun-Alia in: Karan Johar’s Shuddhi at last affirms cast

May-22-2015
Karan Johar ✔ @karanjohar And finally..SHUDDHI starring VARUN DHAWAN and ALIA BHATT…directed by KARAN MALHOTRA..@Varun_dvn @aliaa08 @karanmalhotra21 @DharmaMovies   The dramatization around
494d6ec3-e59e-4950-8907-5e1649cc50c9mediumres

Kejriwal-Jung war: Center issues warning on appropriation of force in Delhi

May-22-2015
The Center issued a warning on Friday on the managerial structure of a Union Territory, clearing up the dispersion of force between