India's Q2 GDP Growth Falls to Six-Year-Low of 4.5%, Fiscal Deficit Target for This FY Already Exceeded, Japan May Not Join RCEP

At 4.5%, Q2 GDP growth is slowest in six years and marks sixth consecutive quarter of falling growth. Fiscal deficit target for this FY already exceeded. After India, Japan may not join RCEP.

 

INDIA

At 4.5%, Q2 GDP growth is slowest in six years and marks sixth consecutive quarter of falling growth.

Slowing and Steadily Losing the Race: India's GDP grew at the slowest pace in six years at 4.5% in the July-September Q2 quarter. This number was lower than Q1's 5% and the 7.1% for the same period last year. This also marks the sixth consecutive quarter of sagging growth.

 

The weak growth was the result of weak manufacturing, falling consumer demand and private investment and a drop in exports.

 

The declining speed reflects the ongoing economic slowdown that has affected virtually all sectors of the economy. It adds pressure on the government to launch more reforms to revive the economy's animal spirits.

 

Gross value added (GVA) growth during the second quarter stood at 4.3% against 4.9% in April-June this year and 6.9% in the September quarter last year. Gross fixed capital formation at current prices declined sharply to 1.02%, compared with 11.8% in the same quarter last year. BS

Fiscal deficit target for this FY already exceeded.

Another One Bites the Dust...: In more sobering news for the Indian economy, the country's April-October fiscal deficit has already exceeded the full-year target for this FY.

 

Fiscal deficit stood at INR7.2Lcr, which is 102.4% of the budgeted target for this fiscal year. Net tax receipts in this period were INR6.83Lcr while total expenditure was INR16.55Lcr. Moneycontrol

After India, Japan may not join RCEP.

 RCEP Jolt: India had left the Regional Comprehensive Economic Partnership - which would have formed the world's largest free trade area - earlier this month citing unresolved apprehensions. The remaining 15 members had then said that they would go ahead with the deal without India, adding that the door would be left open for New Delhi to join in the future.

 

Now, it has emerged that Japan is not considering signing on to RCEP without India onboard. More details here.