India Economic Forecast

India Economic Outlook

July 17, 2018

The economy appears well positioned for FY 2018, which started in April, after the highest GDP growth in seven quarters was recorded in the January–March period. In June, business activity in the private sector increased for the fourth consecutive month, and at the fastest pace since October 2016. The manufacturing and service sectors both benefited from a substantial increase in output thanks to broad-based demand. Moreover, in May, industrial production expanded at a healthy pace. On 4 July, the government approved an increase in the minimum support prices paid to farmers growing summer-sown crops this year. The increase should provide farmers with a profit of 50% over the cost of crop production. This should come as welcome news to farmers, after rainfall was below-average in June, the first month of the important June–September monsoon season.

India Economic Growth

A normalization in cash conditions following the demonetization of late 2016 and the fading of disruptions from last year’s launch of the Goods and Services Tax should facilitate the economic recovery in FY 2018. Nonetheless, risks of fiscal slippage in the run-up to elections next year, concerns over India’s banking sector, increasing global trade tensions and higher oil prices all cloud prospects. Our panel expects GDP growth of 7.3% in FY 2018, which is unchanged from last month’s estimate, and 7.5% 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 Yield7.79-0.04 %Aug 07
Exchange Rate68.63-0.09 %Aug 07
Stock Market37,666-0.08 %Aug 07

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