India’s Growth To Hit 7.3% In FY19, 7.5% In 2019-20
India’s economy is expected to grow by 7.3 per cent in next fiscal and by 7.5 per cent in 2019-20 due to increased investment in infrastructure and waning of the disruptions caused by the rollout of goods and services tax (GST), US rating agency Fitch said in its Global Economic Outlook. The economy will witness a growth rate of 6.5 per cent this fiscal, it said.
India’s economy grew by 7.1 per cent in 2016-17. Global economic growth will remain above 3 per cent for three consecutive years until 2019, a performance achieved for the first time since the mid 2000s, a news agency reportsaid citing the Fitch document.
The Indian economy hit a five-quarter high of 7.2 per cent in the October-December period on good show in key sectors like agriculture, construction and manufacturing.
Fitch said India’s budget for fiscal 2018-19 contains measures, such as a minimum price support and free health insurance, to benefit low-income earners and support rural demand. The government also plans to ramp up infrastructure outlays, in particular by state-owned enterprises.
Accelerating food prices were the main cause of the pick-up in headline inflation. By contrast, fuel price increases have been contained by the government’s decision to roll back excise duties to keep prices stable in the face of rising oil prices.
Fitch expects the Reserve Bank of India to start raising interest rates next year as growth gains further traction.