HSBC Cuts India FY13 GDP Forecast to 5.7 Percent

Bangalore: HSBC, the British multi-national banking and financial services company, cut India’s economic growth forecasts for the fiscal years 2013-14 considering the lack of ‘reforms’, a more challenging global economic backdrop and expectations the central bank will push back the timing for rate cuts. The bank said that it expects India to grow 5.7 percent in fiscal 2013, down from its previous forecast of 6.2 percent.

Earlier it had downgraded the Indian stocks to ‘underweight’ from ‘neutral’, saying the debt crisis I Europe would be a drag on global equities, while at home India has seen no progress on fiscal consolidation or structural reforms. It also cut its gross domestic product forecast for fiscal 2014 to 6.9 percent from 7.4 percent of its previous forecast. 

India had its three-year lowest percentage of its economic growth in the quarter that ended in June; however, it was slightly better than the expected 5.5 percent according to the provisional data.

The Reserve Bank of India is expected to leave its key lending rates steady when it reviews its monetary policy, unlike many other G20 central banks that have been easing conditions to support growth.