Growth reaches a trough; GDP to pick-up from Jan 2020
Economic growth has probably reached a “trough” and the pace of GDP expansion will start rising by January next year, HDFC Bank managing director Aditya Puri has said.
Mumbai: Economic growth has probably reached a "trough" and the pace of GDP expansion will start rising by January next year, HDFC Bank managing director Aditya Puri has said.
While the crisis with the shadow banks is over, there may be a few companies, especially with exposure to the realty space, that may face problems in the future, Puri said.
The comments were made at an interaction before the RBI sharply revised down its GDP growth target to 6.1 per cent on Friday.
The GDP growth has slipped to a six-year low of 5 per cent in the June quarter. "I am not saying boisterous or we are going to have a runaway boom.
I am saying that as we are moving ahead, growth will move higher from where it is. We are probably at the trough," Puri said.
He said higher government spending, investment in infrastructure, Finance Minister Nirmala Sitharaman's move to get more money into the economy and a good monsoon will support the growth.
However, given the very large size of India, the measures will take time to yield results, Puri said, adding that by January, he expects a pick-up in the economic growth.
Banks are witnessing demand for working capital loans at present, he said, adding that the capacity utilisation needs to move up to 80 per cent from the present 77 per cent for investments to happen and it may take some time for the same.
Replying to a query on the fiscal side worries, Puri said while it is "reasonable" to expect a widening of the fiscal gap, he is confident that the same can be bridged through higher disinvestments, better collections of both GST and the income tax, and not worry too much about a marginal slippage.