March 20, 2018 / 6:57 AM / a year ago

BUZZ-Goldman Sachs cuts India's FY19 GDP forecast to 7.6 pct due to bank woes

** Goldman Sachs cuts India’s FY19 gross domestic product (GDP) forecast to 7.6 pct from 8 pct, citing the fallout from over $2 bln fraud at Punjab National Bank

** Goldman Sachs notes the fraud by itself would have only a small economic impact, but it could lead to tighter rules for lenders and lower leverage ratios across the sector

** Such a scenario would reduce the impact of India’s $32.4 bln recapitalisation plan unveiled last year - Goldman Sachs

** Goldman Sachs now expects more provisioning at lenders, with average haircuts on impaired loans of around 60 pct-65 pct over next two years

** India regained status as world’s fastest growing major economy in Oct-Dec qtr, as it grew 7.2 pct, the fastest in five qtrs

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