Indian economy on recovery path, to grow by 6.8% in 2017-18: CLSA analysts
New Delhi: The Indian economy is on the path of recovery and will expand by about 7-7.5% in 2018-19 after growing about 6.8% in 2017-18, analysts at investment group CLSA said at a briefing on Tuesday.
Faster economic growth in the next fiscal will be on account of the normalization of business after rollout of the goods and services tax (GST) in July and the statistical effect of the slower growth estimated in the current fiscal year, explained Mahesh Nandurkar, strategist at CLSA India Pvt. Ltd.
“The effect of destocking (of manufactured items in the supply chain) is temporary. Restocking is happening now, which will lead to normalisation of economic growth,” said Nandurkar.
The Indian economy expanded 6.1% in the last quarter of FY17 and by 7.1% in the full year, according to data released by the Central Statistics Office (CSO) in May. Economic growth decelerated to 5.7% in the June quarter, the slowest pace in three years.
A mid-term review of the economy by think tank National Council of Applied Economic Research (NCAER) on Tuesday forecast 6.2 % GDP growth for FY18.
NCAER’s mid-term review, however, suggested that the fiscal deficit—the gap between government receipts and spending met through borrowing—will exceed the government’s target of limiting it to 3.2% of GDP.
“The current account balance and central fiscal deficit, as percentages of GDP, are projected at—2.5% and 3.4%, respectively, for 2017-18,” said the NCAER review.