Home / Knowledge / News / Textiles / Budget's nominal GDP growth projections ambitious: Moody's

Budget's nominal GDP growth projections ambitious: Moody's

05
Feb '20
Pic: Shutterstock
Pic: Shutterstock
Economic growth projections in the recent budget appear ambitious taking into view the structural and cyclical challenges facing the Indian economy, Moody's Investors Service recently said. The budget expects nominal gross domestic product (GDP) growth of 10 per cent in 2020-21, followed by 12.6 per cent and 12.8 per cent in the next two fiscals.

But Moody's saw GDP growth rising to around 8.7 per cent in the next fiscal from about 7.5 per cent in the current, according to a news agency report.

Stating that growth outlook will remain weak, it has put real GDP growth during the current fiscal at 4.9 per cent, slightly below the government's forecast of 5 per cent. For the next fiscal, it estimated real GDP growth of 5.5 per cent, lower than 6-6.5 per cent projected by the government's Economic Survey.

"Growth has remained relatively weak as a prolonged deleveraging cycle and ongoing stress among non-banking financial institutions (NBFIs), which has constrained the financial system's overall provision of credit, weigh on consumption and investment," it said in a detailed commentary on the budget.

For fiscal 2020-21, it lowered real GDP growth forecasts to 5.5 per cent from 6.3 per cent previous estimate. And for the following fiscal, it put the real GDP growth at 6 per cent from 6.7 per cent projected earlier.

"The significant slowdown in financial sector credit growth from NBFI liquidity constraints and asset quality issues among public sector banks has exacerbated prolonged weakness in private investment and a material decline in consumption, due in part to financial stress among rural households and weak job creation," Moody's said.

The nominal GDP growth, it said, has also declined significantly. Following 11.2 per cent expansion in 2018-19, the government had forecast 12 per cent nominal GDP growth in its July 2019 budget for the current fiscal.

However, according to the government's first advance estimate of GDP last month, nominal GDP growth is likely fell to a much lower rate of around 7.5 per cent for full 2019-20.

"These forecasts (made the Budget) appear ambitious given the combination of structural and cyclical challenges that the Indian economy faces," it said.

Moody's said the government will face challenges in achieving its deficit target for the fiscal year ending March 2021, amid persistent structural and cyclical headwinds to growth.

Fibre2Fashion News Desk (DS)


Must ReadView All

Pic: Shutterstock

Textiles | On 27th Sep 2021

China's infrastructure plan to spur domestic demand, economic change

China’s State Council's executive meeting recently adopted the 14th...

Pic: Shutterstock

Apparel/Garments | On 27th Sep 2021

AAFA calls for tariff relief as US industry deals with shipping crisis

American Apparel & Footwear Association president and CEO Steve Lamar ...

Pic: Shutterstock

Textiles | On 25th Sep 2021

EU extends GSP plus status for Pakistan with 6 new conventions

The European Union (EU) has extended its general system of...

Interviews View All

Textile Industry, Head honchos

Textile Industry
Head honchos

Ensured payment of fee was least concern for students

Footwear Industry, Footwear Retailers

Footwear Industry
Footwear Retailers

Still struggling to mop up higher sales

Textile Industry, Head honchos

Textile Industry
Head honchos

Led by MMF, Indian apparel exports likely to double in next 3 years

Chendhuran Sundar,

Chendhuran Sundar

Headquartered at Singapore, Crocodile is a global fashion and lifestyle...

Bharat Ahuja,

Bharat Ahuja

A mono store brand, <b>Bharat Ahuja's</b> Desire Design Studio has emerged ...

Barry Goodwin,

Barry Goodwin

UK based Amba Projex Ltd designs, manufactures, and installs industrial...

Ian Russell, Pireta

Ian Russell
Pireta

UK-based Pireta has developed a unique free-form process to add durable,...

Dave Rousse, INDA

Dave Rousse
INDA

INDA, a global association of the nonwoven fabrics industry, has been...

Daniel Kaye, RocketLife

Daniel Kaye
RocketLife

<div>RocketLife, an award-winning developer of breakthrough visual...

Abhishek Agarwal, Purple Style Labs

Abhishek Agarwal
Purple Style Labs

Late Indian fashion designer Wendell Rodricks, is known for his...

Anjali Bhaskar, Samatvam

Anjali Bhaskar
Samatvam

<b>Anjali Bhaskar</b> has an experience of 12 years in the fashion...

Sarah Denise Cordery, Sarah Denise Studio

Sarah Denise Cordery
Sarah Denise Studio

Manchester, England-based Sarah Denise Studio provides relevant fashion...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

Leave your Comments


September 2021

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.


Advanced Search