ALSO READSBI sees cost savings, no bad loans surprise after merger with units State Bank of India first-quarter profit misses estimates, bad loans rise India's top bank SBI Q4 net profit jumps but outlook clouded after units' merger SBI led consortium to sell 51% stake in Odisha power plant Majority union in SBI gains membership after associate banks' merger
GDP growth during the second quarter of the current fiscal is expected to remain below 6 per cent due to a downward trend in exports and muted growth in the agriculture sector, a State Bank of India (SBI) report said on Thursday.
The Gross Domestic Product (GDP) growth in the first quarter had fallen to 5.7 per cent, thus raising concerns about 2017-18 annual numbers.
"Q2 growth numbers are likely to be muted, almost like the Q1 numbers (below 6 per cent), and the reasons are many," the "SBI Ecoflash" report, authored by Soumya Kanti Ghosh, SBI's Group Chief Economic Adviser, said.
For example, the US imports of textiles and apparels have grown 30 per cent between April and July. However, Indian exports of apparel and textile to the US in July remained at the same level as in April with a modest increase in quantity.
"But the month of June saw a dip in both quantity as well as value. This is perhaps due to uncertainty before GST (Goods and Services Tax), which is likely to reflect in the coming quarter as well," it said.
High working capital requirement in the GST (based on principle of refund) regime was another factor hurting the small manufacturers in particular, pointed out the report.
"The support that Q1 got from trade, hotel, transport and public expenditure will not be there in Q2. Agriculture growth will be muted as rainfall in the first three months of monsoon was hugely deficit in key foodgrain producing states like Uttar Pradesh, Punjab, Haryana and Madhya Pradesh. There was a sluggish growth in manufacturing and mining sector," the report read.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)