India pulls down GDP growth forecast to 5%

"The lowest outturn in a decade".

According to BBVA, India's Central Statistics Office (CSO), lowered its GDP growth estimate for FY13 (year ending in March) to a weaker-than-expected 5.0% compared with 6.2% last year. 

This would be the lowest outturn in a decade, driven by a broad-based slowdown but most significantly in the service sector.

The estimate would imply that the economy grew by only 4.6% y/y in the second half of FY13. It would also is significantly below consensus expectations (BBVA: 5.6%; consensus: 5.3% - 5.8%) as well as that of the Reserve Bank of India (5.5%).

Slowing growth increases the possibility of further easing by the RBI at its next policy meeting in March (after the rate cut in late January).

"We maintain our expectations of an improving growth outlook for India going forward (6.6% in FY14) amid positive spillovers from policy reforms, a moderation in inflation, and easing monetary policy," BBVA said.