The slowing Indian economy has become a headache for Prime Minister Narendra Modi and his Finance Minister Nirmala Sitharaman (Getty file photo)

With recession, job loss and companies winding up operations, 2019 has proved to be a bad year for India's economy. The GDP growth rate for the second quarter dropped to its lowest in six years. Gross Domestic Product figures released by the Central Statistics Office (CSO) showed that India's GDP for the second quarter of the financial year 2019 (Jul-Sep 19) was 4.5 - lowest since 2012-13.

With consecutive declines for six quarters, the expectations of almost all major financial institutions and rating agencies for India's GDP growth have also come down.

India Today Data Intelligence Unit (DIU) compared the GDP forecast figures announced by rating agencies at the beginning of the year with the current statistics and found that in less than a year, they have cut down GDP predictions for FY 2019-20 by 1.5 per cent on an average.

DIU analysed eight financial institutions/rating agencies - Reserve Bank of India, State Bank of India, World Bank, Asian Development Bank, International Monetary Fund, and credit rating agencies CRISIL, Moody's and CARE RATINGS.

At the beginning of the year, almost all these financial institutions had hoped that India's GDP growth will be better than 2018. However, that did not happen.

Between January and April this year, on an average, rating agencies had predicted a 7.3 per cent GDP growth for India. By the end of the year, between October and December, the average GDP growth prediction for FY 2019-20 by all the eight agencies has come down to 5.8 per cent - a 1.5 per cent cut in a year.

DIU had done a detailed study on how these institutions narrowed down their prospects from India, majorly due to slow domestic demand.



Of all the agencies, the State Bank of India's outlook for the economy was the worst. In November this year, the SBI had reduced the GDP forecast from 6.1 per cent to 5 per cent for the current financial year.

"There can be no recession"

Though rating agencies have lowered their expectations for the country's economic performance, finance minister Nirmala Sitharaman believes the situation is not recessionary.

Responding to queries over the economic situation in the country, Sitharaman recently said in Parliament, "Economic growth may have slowed, but there is no recession, there can be no recession."

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