India's GDP growth to rebound at slower pace: Fitch Solutions

After slumping to an over six-year low, India's economic growth will pick up over the coming quarters but the rebound is expected to be weaker than before, Fitch Solutions said as it trimmed GDP forecast for the current fiscal to 6.4 per cent from 6.8 per cent previously.

India's real GDP growth slumped further in Q1 of FY2019/20 (April March) to 5 per cent year-on-year, from 5.8 per cent in Q4 (January-March) FY2018/19 due mainly to a sharp slowdown in private consumption growth.

"We at Fitch Solutions believe that growth has likely bottomed out and will start to rebound over the coming quarters. However, noting ongoing pressure on the external sector and private consumption, we now expect this rebound to be weaker than before," the rating agency said in its comments on India's growth.

The combination of fiscal and monetary stimulus, continued reform momentum, and favourable base effects would lead to a rebound in growth, it said.

"While we at Fitch Solutions continue to forecast growth to pick up over the coming quarters supported by reforms, fiscal stimulus, and favourable base effects, we now expect the rebound to be weaker than before, given a subdued external and private consumption outlook," it said.

Fitch Solutions said it was revising its growth forecast to 6.4 per cent in FY2019/20, down from 6.8 per cent previously.