Slowing growth? RBI needs to lower its FY19 projection to 7%, says SBICap

Weaker growth and the possibility of inflation undershooting the 2 per cent lower boundary of the RBI's inflation target range are adding to calls for interest rate cuts this year

The Reserve Bank of India needs to soften its economic growth narrative and lower its projections for the current fiscal year.

That’s the view of Mumbai-based SBICap Securities Ltd. after data released Jan. 11 showed industrial production in November grew 0.5 per cent from a year ago, much lower than the expected 3.6 per cent. The RBI needs to cut its growth projection for the year ending March closer to 7 per cent from 7.4 per cent, according to SBICap, to reflect the likely case of below 7 per cent expansion in the second half.