Despite the rash of reform steps announced over the weekend, Standard Chartered India on Monday sharply lowered its GDP growth forecast to 5.4 per cent for FY'13 from 6.2 per cent earlier, citing slowing consumer demand, an anaemic industry and a weak services sector.
The foreign bank also said the latest reform measures will have only long-term impact "We revise down our GDP growth fore cast for FY13 to 5.4 per cent from 6.2 per cent earlier as investment activity has not picked up in the first half and consumer spending is now slowing," StanChart India economists Samiran Chakraborty and Anubhuti Sahay in a report titled, 'Be patient on growth, despite reform rush'.
Noting industrial growth has stalled, they said "we now expect services sector growth, which has significantly lost momentum, to remain low for a while. Agriculture could also suffer from delayed monsoons."
The revision reflects sharper-than-anticipated slowdowns in main growth drivers, the economists said.
Though the first quarter growth at 5.5 per cent was marginally better-than-expected, "we cannot rule out the possibility of sub-5
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