Crisil cuts India's FY 2020 GDP growth forecast to 6.3%

New Delhi: Crisil Research on Wednesday said it has revised downwards its India GDP growth forecast for fiscal 2020 to 6.3 per cent from an earlier estimated rate of 6.9 per cent.

Just a week back, a plunge in domestic private consumption demand, slump in manufacturing, halving of merchandise exports growth, and a high-base effect from last year gnawed away at first-quarter growth which came in at 5 per cent.

Fiscal 2020's first quarter GDP growth at 5 per cent was the slowest in 25 quarters.

"Nevertheless, given the twin trouble of slack private consumption and manufacturing in the quarter, we believe the remaining quarters are unlikely to over reach to take the full year number to our earlier forecast of 6.9 per cent," the firm said.

According to the firm, the 6.3 per cent GDP growth rate is under the assumption that the second quarter will see some mild pick-up in growth, which continues through the year.

"We expect growth to get some lift from the low base effect that will now set in (second half fiscal 2019 GDP growth was at 6.2 per cent)," the firm said.

"An easing monetary policy, improved transmission of rate cuts, and the government's minimum income support scheme to farmers would also feed into consumption. The recently announced steps by the Finance Minister will also address some pain points and support sentiment."