Indian economy expanded 4.7% in the October-December period of the current financial year, recording the slowest growth in 27 quarters, according to the data released by National Statistical Office on Friday. The growth rate for the April-June quarter of the current financial year was revised to 5.6% from 5% and for the July-September quarter to 5.1 per cent from 4.5%.
According to the latest estimates, the economy grew 5.1% in the first nine months of the financial year 2019-20, compared with 6.3% in the same period of previous fiscal. The government has retained the 5% growth forecast for the financial year ending March. The GDP growth for the last financial year was 6.8%.
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The economy has been in the grip of a slowdown in demand and investment. The third quarter growth was affected by slow expansion in manufacturing, power and construction. There were expectations that festive demand in the third quarter will help the economy turn the corner.
The economy watchers are concerned about the possible impact of the new coronavirus outbreak on India’s growth prospects. The global economic growth is expected to suffer a hit of at least 0.2% from the outbreak. Various estimates put the likely losses between $1.1 trillion and $3 trillion.
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The economic survey presented by finance minister Nirmala Sitharaman has predicted a pick-up in growth in the next financial year beginning April 2020. The survey has predicted 6-6.5% growth in 2020-21, while the Reserve Bank of India expects 6% growth. Economic Affairs secretary Atanu Chakraborty has shared this optimism while talking to newspersons after NSO released its advance estimates.
The RBI is expected to cut policy rates further after the inflation is reined in within its comfort level of 4%. The nominal GDP growth rate in the current financial year is projected to be 7.5%, compared with 11% last year.