India: GDP growth forecasts downgraded – Standard Chartered

Analysts at Standard Chartered Bank are lowering the forecast for the Indian economy amid coronavirus outbreak and existing domestic headwinds. The next policy rate cut has also been brought forward. USD/INR is trading at 73.9675.

Key quotes

“We lower our GDP growth forecasts due to the impact of the coronavirus outbreak, both globally and locally, amid existing domestic headwinds.”

“We now expect growth of 4.9% (5.0% previously) in FY20 (ends March 2020) and 5.0% (5.6%) in FY21. We believe the impact on FY20 GDP growth will be modest, as GDP growth of 5.1% in Q1-Q3 should offset a Q4 slowdown.”

“We now expect the next 25bps policy rate cut in April (previously August) in anticipation of weaker economic activity.”