India’s GDP growth to recover to 7.2% in FY18: UBS
Global financial services major UBS expects India’s GDP growth to recover to 7.2% and 7.7% in 2017-18 and 2018-19, respectively, mainly due the government’s reform push and recovery in private investments
- We have no role in selection of Reliance Defence for Rafale deal: Govt
- Rahul asks Modi to reply to Hollande’s claim on Rafale
- Rafale deal: French govt says not involved in choice of Indian partners
- India ‘arrogant’ for cancelling rare meeting: Imran Khan
- PM Modi inaugurates Odisha’s second airport at Jharsuguda
New Delhi: India’s gross domestic product (GDP) growth is expected to recover from 7.1% in 2016-17 to 7.2% this fiscal and further to 7.7% in 2018-19 largely driven by the government’s reform push and recovery in private investments, says a report.
According to official data, India’s growth rate slipped to 6.1% in the January-March quarter and 7.1%, during 2016-17. Global financial services major UBS said the gradual pace of recovery will help improve productivity dynamics and lay the foundation for sustainable growth.
The report lauded the ongoing reform push of the government, like goods and services tax (GST), inflation targeting, a new bankruptcy code, financial inclusion, liberalisation of foreign direct investment (FDI), measures to curb black money and encouraging digitalisation, among others.
“The Indian economy has benefited over the past few years from favourable terms of trade shocks and conscious policy initiatives, which have helped lower macro stability risks and improve productivity dynamics,” Tanvee Gupta Jain, economist at UBS Securities India said in a research note.
“We expect India’s GDP growth to recover to 7.2% and 7.7% in 2017-18 and 2018-19, respectively,” she added. The report further said the current financial year might witness uneven growth recovery largely led by household consumption and the pick-up in growth is expected to be more broad-based in 2018-19 driven by recovery in private investment.
“We expect the pick-up in growth to be more broad-based in 2018-19, largely led by a recovery in private investment (private corporate plus household capex), as growth in consumption and export stabilises,” the report noted.
According to UBS, India’s growth outlook depends on the ability of the policymakers to undertake structural reform in labour, land, capital and business. The most critical reform include resolution of stressed assets in banking system, GST and easing of supply- side bottlenecks.
Also, policy efforts towards stepping up infrastructure investment, labour market reform and measures to boost manufacturing growth will all help improve India’s medium-term growth outlook, it added.
Editor's Picks »
- IL&FS unit chief resigns amid default crisis at group
- Tata Steel to buy Usha Martin’s steel business for up to Rs 4,700 crore
- Apple’s new smartwatch will monitor your heart only in the US, not in India or elsewhere
- Are 5 year-old smartphones still relevant today?
- OPEC and allies struggle to pump more oil as Iran supply falls
- India’s renewable energy sector hits a milestone but loses speed
- All eyes now on share swap ratio in this mega bank merger
- Jet Privilege can actually get higher valuation than Jet Airways
- Profitability of cement firms to take a hit due to weak prices, high costs
- Pidilite’s shares hold their ground despite weak rupee and rising crude