According to Indian rating agency ICRA, India’s GDP growth may fall to 6.2 percent in the current financial year (started on April 1, 2019), the lowest level in the past seven years, 0.6 percentage points below the growth rate recorded in FY 2018-19.
“Given the moderate capacity utilization in various sectors, we don’t expect a broad-based pickup in capacity expansion by the private sector, until there is greater visibility of a sustained uptick in domestic consumption demand,” ICRA said in its latest report. Steel consumption in the country is expected to increase by five to six percent this year against 7.9 percent in the last financial year, according to the announcement by the agency in September. Some market sources said that even some lower figure is possible if demand does not improve before the end of December.
The slowdown in the sector has already been seen in lower growth of steel production, which fell from above 15 percent in May to 6.6 percent in July.