India’s Gross Domestic Product (GDP) growth is likely to further deteriorate to 4.7 percent in the second quarter (Q2) ending September of fiscal 2019-20 due to weakening momentum in the industry, according to credit ratings firm ICRA, which recently forecast that the country’s gross value added (GVA) at basic prices on year-on-year (YoY) basis will be 4.5 percent in the second quarter.
The GDP and GVA were 5.0 percent and 4.9 percent respectively in the first quarter and agriculture and services may maintain the growth rate recorded in that quarter, an ICRA statement said. With subdued domestic demand, investment activity and non-oil merchandise exports weighing upon volume expansion, manufacturing growth is expected to decelerate further from the marginal 0.6 per cent in Q1 of the current fiscal, the statement said.
Heavy rainfall in August-September along with the delayed withdrawal of the monsoon and constrained activities in the mining and construction sectors also contributed to lower demand for electricity from the agricultural and household sectors. In addition to that, muted industrial activity reduced the demand for electricity generation. ICRA expects the Y-o-Y GVA growth of mining and quarrying, construction and electricity, gas, water supply and other utilities to weaken in the second quarter of this fiscal.
