India’s economy expanded at its slowest pace in more than six years in the last three months of 2019, with analysts predicting further deceleration as the global coronavirus outbreak stifles growth in Asia’s third-largest economy.
The gross domestic product (GDP) data released on Friday showed government spending, private investment and exports all slowing, while a slight upturn in consumer spending and improvement in rural demand lent support.
The quarterly figure of 4.7% growth matched the consensus in a Reuters poll of analysts but was below a revised – and greatly increased – 5.1% rate for the previous quarter.
The central bank has warned that downside risks to global growth have increased as a result of the coronavirus epidemic, the full effects of which are still unfolding.
“So far as the impact (of coronavirus) on India is concerned, we will take some more time to arrive at more accurate conclusions, but coronavirus is definitely going to pull down global growth,” Shaktikanta Das, governor of the Reserve Bank of India (RBI), said in Mumbai on Friday.
Prime Minister Narendra Modi’s government has taken several steps to bolster economic growth, including a privatisation push and increased state spending, after cutting corporate tax rates last September.
In its annual budget presented this month, the government estimated that annual economic growth in the financial year to March 31 would be 5%, its lowest for 11 years.
Modi’s government is targeting a slight recovery in growth to 6% for 2020/21, far below the level needed to generate jobs for millions of young Indians entering the labour market each month.
The annual GDP figure for the September quarter was ramped up from an earlier estimate of 4.5%, while the April-June reading was similarly lifted to 5.6% from 5%, data released by the Ministry of Statistics showed on Friday.