Crisil cuts India's growth forecast to 7.4% on weakening global growth

Crisil on Monday cut India's growth forecast for current financial year to 7.4 per cent on the back of weakening global GDP and trade growth.

India's growth in the July-September quarter slipped to 7.1 per cent from 8.2 per cent in the April-June quarter.

"For financial year 2019, we are lowering our GDP growth forecast by 10 basis points to 7.4 per cent from 7.5 per cent estimated earlier. Forecasts of lower global trade and GDP growth has created a downward bias to growth in emerging economies," Crisil said.

India's export, which saw a revival in early part of 2018, could likely see a slower growth, it projected.

"The forecast has a downward bias given that global growth prospects are turning weaker than estimated earlier. Also, if liquidity issues persist in the financial system, demand could get further dented," Crisil said.

Despite the downward revision at 7.4 per cent, India's growth in the financial year 2019 will be faster than both, the 6.7 per cent seen in financial year 2018 and the trend rate of growth, Crisil said.

It said the long-term average growth rate seen in the last 13 years, as per the recently released GDP back series data is 6.9 per cent.

"For the rest of this financial year, growth will find support from private consumption, driven by continues government spending on construction activities, benign inflation and revision in government salaries at the state level," Crisil said.