India's growth rate can further slow down to 4.7 per cent in Q2 FY2020 due to weak industrial output, rating agency ICRA has predicted.
Consequently, the growth rate of India's GDP and the gross value added (GVA) can further deteriorate at basic prices in year-on-year terms to 4.7 per cent and 4.5 per cent, in Q2 FY2020, from 5 per cent and 4.9 per cent, respectively, in Q1 FY2020.
Which sectors can maintain growth rate?
However, sectors such as agriculture and services may be able to "maintain the growth rate recorded in Q1 FY2020".
"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 FY2020," said ICRA's Principal Economist Aditi Nayar.
"To some extent, lower raw material costs would bolster earnings, and may prevent manufacturing GVA from slipping into a YoY contraction in Q2 FY2020."
(With agency inputs.)