Indian Economy Had A Hesitant 2018; Will This Year Be Better?

After nose-diving to a five-year low of 6.7% in 2017-18, India’s GDP growth is projected to grow at over 7% in 2018-19.

- Tushar K. Mahanti

Most of the GDP growth projections by international development bodies and domestic analysts are showing a sharp rise in GDP in 2018-19 followed by an equally if not higher, growth next year.

Higher GDP growth projections

India’s GDP is expected to grow at 7.3% in 2018-19 and 7.5% in the following two years, the World Bank has forecast recently, attributing it to an upswing in consumption and investment. The bank said India will continue to be the fastest growing major economy in the world.

In its latest World Economic Review, the International Monetary Fund (IMF) earlier had predicted India’s GDP to increase by 7.3% in 2018-19 and by 7.4% next year. Moody’s Investors Services in its Global Macro Outlook 2019-20 has predicted India’s GDP to grow 7.4% in 2018 -19.

Back home, the industry body CII has observed that despite external vulnerabilities arising out of rising oil prices, trade wars between major global trading partners and monetary tightening by the US in 2018, India stood out as the world’s fastest growing major economy and will grow in the range of 7.5%.

The RBI has retained its GDP forecast at 7.4% for 2018-19 and expects the growth to speed up further to 7.5% in the first half of 2019-20, driven by acceleration in investment activity. The government’s own growth projection is however, a little lower. According to the first advance estimates of GDP, released by CSO early this month, GDP would grow by 7.2% in the current year.