India GDP 6.9% on reform push: HSBC

Nov 08 2012, 20:03 IST
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SummaryThe recent spate of policy reforms are likely to aid India grow faster: HSBC

HSBC today said the Indian economy, which is projected to grow at 5.7 per cent this fiscal, is likely to clip at a faster pace next fiscal at 6.9 per cent following the recent spate of policy reforms.

"We expect, the economy to grow at 5.7 per cent this fiscal and 6.9 per cent in the next financial year," HSBC India and Asean chief economist Leif Eskesen told reporters here.

The FY'13 growth forecast is a bit higher than government's own growth assumptions, and way ahead of many of its own peers, which all have pegged growth this year falling to around 5 per cent.

The IMF had recently pegged the growth this calendar year at a poor 4.9 per cent, while Finance Minister P Chidambaram early this week had said growth would hit a decadal low of 5.5 per cent this fiscal.

Basing his optimism for higher growth next fiscal, he said policy reforms, traction in infrastructure projects and rise in investment would be the key factors driving growth next fiscal.

"We see early signs of reforms, which is likely to improve the investment climate. Also, some traction in infrastructure projects is expected. Further, some stabilisation in global factors will also help growth next fiscal," Eskesen said.

Talking about inflation scenario, he said inflation is likely to go up in the near-term after which it is likely to moderate.

Wholesale price index based inflation stood at 7.81 per cent for September, much above the comfort level of the central bank, which held back a much-sought after policy easing last month-end.

Talking about the way ahead for the economy, Eskesen said structural reforms along with loosening of monetary policy would support future growth.

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