India’s economy should grow between 7 percent and 7.5 percent in the 2018/19 (April-March) with exports and private investment set to rebound, the country’s top finance ministry economist said in a report presented on Monday.
The Economic Survey, which sets the stage for Finance Minister Arun Jaitley’s annual budget on Thursday, forecast that economic management will be challenging in the coming year.
The survey was prepared by the finance ministry’s Chief Economic Adviser Arvind Subramanian, who estimates that gross domestic product will have grown 6.75 percent in the current fiscal year ending in March.
Here are the highlights of the report:
* 2018/19 Growth seen at 7 pct to 7.5 pct y/y
* 2017/18 GDP growth seen at 6.75 pct y/y
* 2017/18 industry growth seen at 4.4 pct
* 2017/18 farm sector growth seen at 2.1 pct
* Economic management will be challenging in the coming year
* Biggest source of upside to growth to be from exports
* Cyclical conditions may lead to lower tax and non-tax revenues in 2017/18
* Private investment poised to rebound
* Target for fiscal consolidation specially in a pre-election year can carry a high risk of credibility
* Current account deficit for 2017/18 expected to average 1.5-2 pct of GDP
* Pause in general govt fiscal consolidation cannot be ruled out in 2017/18
* Suggests modest (fiscal) consolidation that signals a return to the path of gradual but steady deficit reductions
INFLATION, POLICY RATES
* Persistently high oil prices remain a key risk, to affect inflation
* If inflation doesn’t deviate from current levels policy rates can be expected to remain stable
* Average CPI inflation seen at 3.7 pct in 2017/18