India predicts slower 5% growth

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    NEW DELHI- India forecast 5 percent growth for the current financial year, the slowest pace in 11 years, which will likely prompt the finance minister to opt for extra fiscal stimulus when she presents the annual budget next month.

    The government is expected to announce tax concessions for individuals and increase spending on infrastructure after cutting corporate tax rates last year, officials and economists said.

    Finance Minister Nirmala Sitharaman last week unveiled a plan to invest 102 trillion rupees ($1.4 trillion) in infrastructure over the next five years in a bid to make India a $5 trillion economy by 2025.

    Annual economic growth slowed to 4.5 percent in the July-September quarter, the weakest pace since 2013, blamed on weakening demand and private investment, putting pressure on Prime Minister Narendra Modi to speed up reforms as five rate cuts have failed to help.

    The financial year ends in March.

    Gross domestic product is estimated to grow 5.0 percent in 2019/20, slower than the 6.8 percent growth of 2018/19, the Ministry of Statistics said in a statement.

    Indian growth had slowed to 3.1 percent in 2008/09 after the global financial crisis.

    “The slowdown in economic growth implies the government will have to come up with a fiscal stimulus in the budget,” said N.R. Bhanumurthy, economist at National Institute of Public Finance and Policy, a Delhi-based think-tank. – Reuters