SBI Research reduced India’s GDP growth forecast, the growth rate may be 5.8% in the second quarter
SBI has cut India’s GDP growth rate estimate for the second quarter.
The GDP growth rate in the second quarter could be 5.8 percent.
There was a slowdown in economic activity between June and September.
New Delhi. SBI Research has slashed the country’s GDP growth forecast to 5.8 per cent for the July-September quarter due to weakness in manufacturing activities and rising margin pressure. A report released on Monday by SBI Research said that the GDP growth rate in the second quarter of the current financial year could be 5.8 per cent, which is 0.30 per cent less than the average estimate. The GDP figures for the July-September, 2022 quarter are to be released by the government on 30 November.
According to the team led by Soumya Kanti Ghosh, Head of SBI Research, the operating profit of companies other than banking and financial sector declined by 14 per cent in the second quarter as against a 35 per cent increase in the same quarter a year ago. .
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Operating margin of companies decreased due to increase in production cost
According to the report, the growth rate in the revenue of these companies has been good in the reporting quarter, but their profit has declined by about 23 percent as compared to a year ago. Apart from this, pressure has also been seen on the margins of listed companies other than banking and financial sector. Due to increase in production cost, the operating margin of the companies declined to 10.9 per cent in the second quarter as against 17.7 per cent in the same period last year.
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GDP growth rate in the second quarter is less than the average market estimate
According to PTI, SBI Research believes that under such circumstances, the GDP growth rate in the second quarter could be 5.8 per cent, much lower than the average market estimate (6.1 per cent). With this, the growth rate for the entire period of the current financial year can be 6.8 percent, which is 0.20 percent less than the previous estimate of the Reserve Bank of India. This estimate by SBI Research is based on a composite index based on a basket of 41 leading indicators.
Figures are expected to improve in the third quarter
Ghosh said that this estimate shows that there was a slowdown in economic activity between June and September, but with the improvement in economic activity in October, the figures are expected to improve in the third quarter. He said that several indicators show the combative character of the Indian economy despite global shocks, rising inflation and lack of external demand.
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Tags: economics, GDP, GDP growth, India’s GDP, sbi
FIRST PUBLISHED : November 28, 2022, 21:00 IST