NEW DELHI: With the International Monetary Fund (IMF) agreeing that the global downturn is “more pronounced” in large developing economies like India, analysts forecast continued poor performance by India Inc in the second quarter.
Heralding more bad news for India on the economic front, the World Economic Forum said on Wednesday that the country has slipped 10 places in the global competitive index as rivals performed better.
Meanwhile, a report by Edelweiss Securities paints a bleak picture for India Inc.
According to the report, corporate India’s revenue and profits are set to decline by 3% and 6%, respectively, in the second quarter.
On a sequential basis, the decline is pegged at 4% and 6%, respectively. In fact, revenue growth of most sectors is likely to moderate with only pharma and banks likely to grow over 10%, Edelweiss added.
In another development, the Association of Mutual Funds of India has reported that outflows in debt schemes have pulled down mutual funds’ assets under management by end-September by nearly Rs 1 lakh crore to Rs 24.50 lakh crore.
IMF predicts slower growth in 2019 globally.
“The global economy is now in a synchronised slowdown. This means that growth this year will fall to its lowest rate since the beginning of the decade,” IMF’s new managing director Kristalina Georgieva said.
The IMF chief urged the use of monetary policy wisely to improve financial stability.
“Now is the time for countries with room in their budgets to deploy — or get ready to deploy — fiscal firepower. In fact, low interest rates may give some policymakers additional money to spend,” she said.