(GDP) grew 5% in the first quarter of FY20.
This is the slowest growth since the fourth quarter of FY13.
GDP growth was 8% in the year-earlier quarter and 5.8% in the preceding one.
China’s economy in comparison grew 6.2% in the June quarter.
Consumption collapsed to an 18-quarter low of 3.1% from 10.6% in the March quarter.
Automobile sales, a barometer of the economy, have declined sharply in recent months .
Slowdown in investment and consumer demand derailed manufacturing, which grew just 0.6%.
Net global trade wind slowdowns is def. a factor (eg. Sino-American trade conflict etc. ) which is affecting most economies, eg:
Jan 18 to Jul 19: China - 6.8>6.2, EU - 0.7>0.2, US - 3.5>2.0, Russia - 2.2>0.9.
The following recent announcements will help: Liberalising FDI for select sectors, ensuring flow of credit to non-banks, killing/easing up on the controversial tax surcharge on foreign portfolio investors, more capital for banks and the big bank consolidation.
But this slowdown is cyclical vs. structural and will require deeper reforms.
More interest rate cuts probably will be required and will happen (imo - October / November).
Lower interest rates mean lower borrowing costs, people will eventually start spending more and drive up consumption.