As the GDP growth has plunged to an over six-year low of 4.5 per cent in the second quarter of the ongoing fiscal, credit expansion may plummet to a six-decade low of 6.5-7 per cent in FY20, says a report.
Credit growth was a high 13.3 per cent in the previous fiscal, says rating agency
Icra in a report. If the forecast turns out to be true, this will be lowest credit growth in as many as 58 years — credit growth stood at a low 5.4 per cent in FY 1962, according to the annual credit growth data on the RBI website.
It can be noted that GDP growth plunged to a 25-quarter low of 4.5 per cent in the second quarter and to 5 per cent in the first quarter and nobody is forecasting better numbers going ahead.
Even the RBI has massively slashed its growth forecast to a low 5 per cent for the year — down by a massive 240 bps from its February projection of 7.4 per cent.