The first quarter (of FY18) was where the Indian economy bottomed out, and it is now seeing a very strong V-shaped recovery, says economic affairs secretary Subhash Chandra Garg
Mumbai: The 7.2% growth in the Indian economy during the October-December quarter has put the country in the highest growth bracket globally and recovery will continue to be sharp going ahead, economic affairs secretary Subhash Chandra Garg said on Thursday.
“We have said this earlier that the first quarter (of FY18) was where we bottomed out, and we would see a very strong V-shaped recovery. The growth in the second and third quarter brings evidence to that," Garg told reporters on the sidelines of an IVCA event in Mumbai.
“The third quarter grew at 7.2% and it puts us in the highest growth bracket in the world. I see no reason why that V-shaped recovery should not continue henceforth. I can’t talk about double-digit growth at this stage, but certainly there will be very strong growth," he said.
The Q3 GDP growth of 7.2% was the highest in five quarters, with the previous high recorded at 7.5% in the July-September quarter of 2016-17. In the first quarter of the current fiscal, India’s GDP growth rate stood at 5.7%, slowest in three years, before recovering to 6.5% in Q2.
According to the second advanced estimates of the central statistics office (CSO), Indian economy is expected to grow at 6.6% in the fiscal ending 31 March 2018, compared to 7.1% in 2016-17.
On Wednesday, top finance ministry officials led by Garg, chief economic adviser Arvind Subramanian and principal economic adviser Sanjeev Sanyal met Thomas Rookmaaker, director (sovereign ratings) at Fitch Ratings, and other officials. The meeting was ahead of the annual review of the country rating by Fitch.
According to Garg, Fitch had a good assessment of the country’s future prospects. “Fitch assessment about the Indian economy, reforms, and path forward seems to be extremely positive but whether it will result in a certain kind of upgrade and when, that is for the rating agency to decide," Garg said Thursday.
Fitch had last upgraded India’s sovereign rating from BB+ to BBB- with stable outlook on 1 August 2006.
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