HSBC lowers India's growth forecast for 2013-14 to 5.5% on slow reform process

Growth has been in line with its expectations in 2013, but slower reform progress will delay the recovery, says HSBC

Global financial giant HSBC lowered India's growth forecast for this financial year to 5.5 per cent from six per cent today, citing slow reform process.

HSBC said growth has been in line with its expectations in 2013, but slower reform progress will delay the recovery.

"While we expect further progress on reforms, it will only materialise slowly. Moreover, the global recovery is likely to come later. The recovery in India will, therefore, prove even more protracted," HSBC said in a research note.

HSBC has consequently, cut growth forecast for FY2014 to 5.5 per cent against 6 per cent and FY2015 to 6.6 per cent versus 7.1 per cent, the note said.India's economic growth rate slipped to a decade low of five per cent in 2012-13 on account of poor performance in farm, manufacturing and mining sectors.

The government has pushed through numerous reform measures over the past nine months.

However, implementation and announcements have tapered off recently and could slow even further, it said. "This monsoon parliamentary session will prove an important test for the government's ability to sustain the reform push," HSBC said.

There are number of key bills like, land acquisition bill, insurance bill, pension bill, that are likely to be voted on during the monsoon parliamentary session that starts in July/August.