FITCH Forecasts India’s GDP Growth At 7.4 Percent In Current FY

INDIA’s growth forecast for the current fiscal ending on March  31,2019,  has been  upped to 7.8 per cent from 7.4 per cent projected earlier by Fitch, New York headquartered  global rating  agency .It  has however flagged tightening financial conditions, rising oil bill and weak bank balance sheets as headwinds to growth  impacting Indian economy . “We have revised up our forecast for FY2018-2019 growth to 7.8 per cent from 7.4 per cent on the back of the better-than-expected 2Q18 outturn. India’s growth likely peaked in 2Q18 (April-June) though,” Fitch said in a statement to media..The Indian rupee (INR) is the worst-performing major Asian currency this year.”And despite the central bank’s (Reserve Bank of India) greater tolerance for currency depreciation, interest rates have been raised by more than anticipated.” Fitch has also forecast inflation picking up to the upper part of the central bank’s target band (4 per cent, plus-minus 2 per cent) within the forecast horizon on relatively high demand-pull pressures and INR depreciation. The upward revision in growth forecast comes in the backdrop of GDP expanding 8.2 per cent in April-June quarter, higher than Fitch’s expectation of 7.7 per cent.”This robust performance was partly attributable to a powerful base effect, with GDP growth dampened in 2Q17 (April-June) by companies de-stocking ahead of the rollout of the goods and services tax,” Fitch said. It has cut the growth forecasts for FY 2019-2020 and Financial Year 2020-2021 growth by 0.2 percentage points to 7.3 per cent. Fiscal policy should remain quite supportive of growth in the run-up to general elections likely to be held in early 2019, it added. ( Pic  courtesy to shirt- company .com )


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