Worst for economy is over, strong global demand expected to push growth above 7% in FY19

By: |
January 12, 2018 3:16 PM

As India is expected to grow at a four-year low of 6.5% in the fiscal year 2017-2018, experts are pegging a higher growth in the next fiscal, saying that there are signs that "country’s growth has bottomed

7th pay commission, 7th pay commission latest news, jammu and kashmir, budget, 7th cpc news, 7th cpc latest news, 7th pay latest newsHigh-frequency data signal an improvement in the underlying trends in FY19.

As India is expected to grow at a four-year low of 6.5% in the fiscal year 2017-2018, experts are pegging a higher growth in the next fiscal, saying that there are signs that “country’s growth has bottomed.” DBS group economist Radhika Rao, in a note, said, “Consumption is on track to improve, which, along with better export orders, could support manufacturing and services. Investment is a mixed bag, but the worst is over. Strong global demand should help India; we expect growth to improve (from mid-6%) to low-7% in FY19.”

“High-frequency data signal an improvement in the underlying trends, even if all engines are not firing away. Consumption is on track to improve, which, along with better external demand, could support manufacturing and services,” Radhika Rao added.

Other economists, too, have predicted similar economic growth in the next fiscal. Deutsche Bank India CEO Ravneet Gill has said that the structural changes that are undertaken by the government haven’t yet paid off and so, upside from that is significant. “Moreover, corporate earnings growth is also expected to return in 2018,” Ravneet Gill told CNBC-TV18.

A report by Standard Chartered also pegged a better growth for India, saying that the worst is over for the GDP. “We expect growth to normalise gradually over the next four to six quarters as the disruptive impact of major policy changes fades,” Standard Chartered said in its Economic Outlook in 2018 report.

Kotak Securities, too, said that the economy will gradually recover in FY19. Meanwhile, several macroeconomic factors also pointed towards an economic uptick in coming months. According to ICRA, manufacturing is likely to display healthy expansion in volumes in Q3 FY 2018, which should result in a substantial improvement in capacity utilisation on a year-on-year basis.

The Nikkei India Manufacturing Purchasing Managers’ Index (PMI) also rose to 54.7 in December, a five-year high, as growth was recorded across all three monitored categories — consumer, intermediate and investment. Indian manufacturers upped their staffing levels at the end of the year. In fact, job creation accelerated to the strongest since August 2012, the survey said.

Do you know What is Positive GDP growth seen in Q3, need to fight inflation: RB, Cash Reserve Ratio (CRR), Finance Bill, Fiscal Policy in India, Expenditure Budget? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1RBI remains steadfast to take any further measures to support growth: Shaktikanta Das
2Union Minister Nitin Gadkari pitches for more research to identify import substitute products
3Road to Recovery: Imports rise for the first time in 10 months