New Delhi, February 26: SBI Ecowrap in its current report has revised upwards FY20 GDP at 4.7 per cent from 4.6 per cent with a downward revision in FY19 GDP.
“In principle, with FY19 GDP numbers at 6.1 per cent, on an unchanged base FY20 GDP could have been at 5.7 per cent. However, we were earlier anticipating a downward revision in FY20 growth rate from 5 per cent to 4.6 per cent, but now the statistical benefits of a downward revision in FY19GDP growth could push up FY20 GDP to 4.7 per cent,” the report done by Soumya Kanti Ghosh, Group Chief Economic Adviser, SBI stated.
It further said: “We believe this growth rate in FY20 should be looked through the prism of the synchronised global slowdown, and India cannot be isolated. The government is addressing sector-specific problems. The NBFC, telecom, roads, power and real estate are sectors that require specific attention and there must not be any negative sector-specific policy surprises in the current uncertain environment! In this context, an impending solution to the telecom sector should be the need of the hour.”
The report expressed its concern over the impact of ongoing corona virus spread. It said the impact of corona virus on India could now happen with a lag. The outbreak is now expected to cause a growth erosion of 100 bps in China alone.
Although a number of cases of corona virus in India are less, the economic impact is expected to accrue from supply chain risk, which may link up with exports as in pharmaceutical sectors. On the direct export side, a set of commodities may see some disruption where China is an important export destination.
Some of the commodities that may see temporary disruption include cotton, diamonds to Hong Kong, import of auto parts and certain items critical to solar projects. Poultry sales have also seen some impact although corona virus, not of avian origin.