India Economic Forecast

India Economic Outlook

October 16, 2018

The economy had a mixed second quarter this fiscal year, which runs from April 2018 to March 2019, after GDP accelerated at the fastest pace in over two years in the first. On the plus side, business activity in the private sector increased in Q2 at a faster rate than in Q1. However, given that India purchases about 80% of the oil it consumes from abroad, recent increases in oil prices caused the merchandise trade deficit to widen through to August. To help reduce the growing external sector imbalance, the government raised import tariffs on USD 12 billion worth of imports on 26 September. In addition, excise duties on gasoline and diesel were cut on 4 October to lessen the impact of higher fuel prices on consumers.

India Economic Growth

Economic growth should accelerate in FY 2018, due to fading disruptions from the demonetization of November 2016 and the launch of a goods and services tax in July 2017. However, recent signs of fiscal slippage in the run-up to next year’s general elections, escalating global trade protectionism and higher oil prices weigh on the outlook. Our panel expects GDP growth of 7.4% in FY 2018, which is unchanged from last month’s estimate, and 7.4% again in FY 2019.

India Economy Data

20132014201520162017
Population (million)1,2501,2661,2831,3001,317
GDP per capita (USD)1,4881,6141,6321,7501,979
GDP (USD bn)1,8592,0442,0942,2752,607
Economic Growth (GDP, annual variation in %)6.47.48.27.1-  
Consumption (annual variation in %)7.36.47.47.3-  
Investment (annual variation in %)1.62.65.211.1-  
Industrial Production (annual variation in %)3.34.13.44.54.3
Public Debt (% of GDP)68.567.869.668.970.2
Money (annual variation in %)12.311.711.56.321.9
Inflation Rate (CPI, annual variation in %, eop)8.25.34.83.94.3
Inflation Rate (CPI, annual variation in %)11.06.04.94.53.6
Inflation (PPI, annual variation in %)5.21.3-3.61.82.9
Policy Interest Rate (%)8.007.506.756.256.00
Stock Market (annual variation in %)18.924.9-9.416.911.3
Exchange Rate (vs USD)60.0262.2966.2564.8665.11
Exchange Rate (vs USD, aop)60.4261.1465.4267.0464.46
Current Account (% of GDP)-1.8-1.4-1.1-0.7-1.9
Current Account Balance (USD bn)-32.8-27.6-22.1-15.2-48.7
Trade Balance (USD billion)-136.6-137.5-117.2-119.0-157.0
Exports (USD billion)314311262275303
Imports (USD billion)451448379384460
Exports (annual variation in %)4.6-1.2-15.65.111.0
Imports (annual variation in %)-8.0-0.6-15.41.319.7
International Reserves (USD)304341356373421
External Debt (% of GDP)24.023.223.220.7-  

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India Facts

ValueChangeDate
Bond Yield7.91-0.04 %Oct 17
Exchange Rate73.53-0.09 %Oct 18
Stock Market34,780-0.08 %Oct 17

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