Global financial services provider Morgan Stanley revealed in a statement that India’s GDP growth is all set to touch 7.5% this fiscal year. The company noted that growth recovery will remain robust during this fiscal year and the momentum is likely to pick up even further in the April to June quarter. The economic growth information for the April to June (Q1 2018-19) is yet to be released.
In a research note, Morgan Stanley reported that India’s GDP growth is expected to pick up to 7.5% in the current fiscal year compared to the 6.7% growth reported in the fiscal year 2017-18. The company noted that this economic growth will be supported by both domestic consumption and international exports.
Commenting on the macroeconomic factors, the report noted that factors like inflation and fiscal deficit are expected to be stable in this fiscal year. While the Consumer Price Index (CPI) inflation is likely to be slightly above the target of 4%, the fiscal deficit is expected to be around 2.5% of the country’s GDP.
The report also cautioned about various risks that could have a negative impact on the growth outlook. It noted that various factors like a weak monsoon, slower global growth, and lower external demand due to rising trade tensions could have a major impact on the country’s GDP growth. In addition to this, other factors like rising oil prices, increase in dollar strength, higher US interest rates, private placement investments, etc. could also affect the country’s economic growth.
In the January to March quarter, India’s GDP growth increased significantly to 7.7% owing to robust performance in both manufacturing and service sectors. Based on this growth, the government of India retained its outlook of 7.5% growth for the fiscal year 2018-19. A report released by Japanese financial holdings company Nomura stated that India’s economic growth might slow down to 7.2% in the second half of the current fiscal year.
Source: Financial Express