Breaking News

You are here » Indian-Commodity  :  Economy  :  Care Ratings estimates India's GDP to accelerate to 7.5% in FY19

25-May2018

Care Ratings estimates India's GDP to accelerate to 7.5% in FY19

Credit rating agency, Care Ratings in its latest report titled 'Indian Economy Prognosis: 2018-19' has forecasted that India's gross domestic product (GDP) growth will accelerate to 7.5% in 2018-19, from 6.6% in the last fiscal. It added that the growth will be dependent on favorable monsoon, pick up in investment and increased private sector spending supported by continued government spending. However, it pointed out that some areas of concerns are headline inflation, lending rates, fiscal prudence, current account deficit (CAD) and exchange rates.

The rating agency estimated that CAD will widen up to 2.5% of GDP for FY19, from the 1.7% for the first nine months of FY18, due to wider trade deficit, an estimated slowdown in the portfolio flows and increased oil prices. It also expects that farm sector growth to inch up to 4%, from the 3% in the year-ago period, and industrial output growth to go up to 6%, from 4.3% in the previous year. Besides, it noticed that meeting the wider 3.3% target on the fiscal deficit will be difficult and adherence will depend on achievement of the Rs 80,000 crore divestment target, goods and services tax (GST) collections and tax receipts. 

On the inflation front, the report said that the consumer price inflation will go up to 5.5% for the fiscal, from the 3.6% in FY18, which may result in rate hikes of up to 0.50% by the inflation-focused Reserve Bank of India during the year. For the banking sector, it said that it will have an 'upward bias' with credit growth estimated to increase to 12% and deposits to expand by 10% and added that non-performing assets (NPAs) will be a major challenge for lenders.

Care Ratings has said that the estimates in the report have been made assuming that crude oil does not spiral over the present $80 per barrel and settles down at up to $75. It also said that the exchange rate will slip further to the 67-68 levels against the US dollar by the end of FY19 and added that the reserves will grow marginally to $435 billion, from $425 billion at present.


Related News

View all news

P-notes investment jumps to Rs 78,110 crore at March-end

With positive market sentiments, the share of foreign portfolio investments (FPI) in domestic capital markets through participatory notes (P-notes) jumped to Rs 78,110 crore at the end of March. According......

India's steel demand may grow above 7% in 2019, 2020: World Steel Association

The World Steel Association in its latest report 'Short Range Outlook April 2019' has said India's steel demand is likely to grow above 7 per cent in the current year (2019) as well as next year (2020).......

India likely to receive 'near normal' monsoon in 2019: IMD

Easing concerns over farm and economic growth in the country, the India Meteorological Department (IMD) in Long Range Forecast for 2019 southwest monsoon rainfall stated that the country is likely to have......

Top News

View all news

Lupin seeks more time from commerce ministry to complete project in Indore SEZ

Lupin has sought more time from the commerce ministry to complete its project, with proposed investment of Rs 205.69 crore, in the Indore Special Economic Zone (SEZ). The company is setting up its pharma......

Tata Sponge Iron to shift its registered office to Kolkata

Tata Sponge Iron has decided to shift its registered office from Keonjhar in Odisha to Kolkata, subject to the approval of the members of the company and other regulatory authorities. The company has also......

GVK Power's arms ink pact with ADIA, NIIF

GVK Power and Infrastructure's subsidiaries -- GVK Airports Developer (GVKADL) and GVK Airport Holdings (GVKAHL) have signed a term sheet and exclusivity agreement with Abu Dhabi Investment Authority (ADIA)......