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India's GDP growth for FY20 to be 6.8%: Fitch
Why is it in the news ?
- The global credit rating provider Fitch cut India’s economic growth forecast for the next financial year starting April 1, to 6.8%.
- It had earlier estimate the growth of 7%. However, due to the weaker than expected momentum in the economy, it cut the growth number to 6.8%.
- It had cut India’s FY19 GDP growth forecast to 7.2% from 7.8% on December 6.
More in the news
- The rating agency has cut growth forecasts for FY20 and FY21 to 7% from 7.3% and 7.1 per cent from 7.3%, respectively.
- According to Fitch, the RBI, has adopted a more dovish monetary policy stance and cut interest rates by 0.25% at its February 2019 meeting, a move supported by steadily decelerating headline inflation.
- On the fiscal side, the budget for FY20 plans to increase cash transfers for farmers.
- Dovish monetary policy:(1) It means reducing the interest rates, in order to increase the money supply in the economy.(2) It increases the inflation and there is also possible increase in GDP growth.
- Hawkish Monetary Policy:(1) Here the interest rates are increasing and reducing the money in circulation.(2) It reduces the inflation and possibly reduced GDP growth.
Source
The Hindu.