Abstract
Subject India's macroeconomic problems. Significance Fitch Ratings last week reduced its forecast for Indian GDP growth in fiscal year 2019/20 (April-March) to 5.5%, compared to a projection in June of 6.6%. The Reserve Bank of India (RBI) earlier this month forecasted 6.1%, compared to a projection in February of 7.4%. Either Fitch’s or the RBI’s latest figure would be India’s lowest full-year growth rate since Prime Minister Narendra Modi came to power in 2014. Impacts As growth slows further, more foreign portfolio investors will withdraw from Indian equity and debt markets. Plans to merge public sector banks, consolidating their debts, will prompt more protests by bank workers fearing for their jobs. Opposition parties will challenge the nationally ruling Bharatiya Janata Party on its economic record at upcoming state elections.
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