India Economic Forecast

India Economic Outlook

September 19, 2017

Economic momentum sputtered in the first quarter of FY 2017 as growth slid to the slowest rate in three years. A poorly performing external sector, which was hit by a strong rupee and confusion over the implementation of the Goods and Services Tax (GST), was largely to blame. In addition, investment was weighed down by a stressed banking sector and overleveraged firms. However, the impact from the GST implementation should be temporary, and growth is seen gaining steam going forward. Moreover, incoming data for Q2 FY 2017 is tentatively bright: Industrial production rebounded in July and the manufacturing PMI returned to expansionary territory in August. On a positive note, the new GST generated higher revenue than expected in July, the first month of implementation. Despite the robust collections figures, it appears increasingly likely that the government could fall short of its fiscal targets, as the deficit rose to 92.4% of the full-year target in July.

India Economy Data

Population (million)1,2431,2591,2761,2921,309
GDP per capita (USD)1,4651,4771,5971,6111,729
GDP (USD bn)1,8211,8602,0382,0822,264
Economic Growth (GDP, annual variation in %)
Consumption (annual variation in %)
Investment (annual variation in %)
Industrial Production (annual variation in %)1.1-
Public Debt (% of GDP)69.168.568.669.669.5
Money (annual variation in %)7.512.310.711.56.3
Inflation Rate (CPI, annual variation in %, eop)
Inflation Rate (CPI, annual variation in %)
Inflation (PPI, annual variation in %)
Policy Interest Rate (%)7.508.007.506.756.25
Stock Market (annual variation in %)8.218.924.9-9.416.9
Exchange Rate (vs USD)54.2860.0262.2966.2564.86
Exchange Rate (vs USD, aop)54.3760.4261.1465.4267.04
Current Account (% of GDP)-4.8-1.8-1.4-1.1-0.7
Current Account Balance (USD bn)-87.4-32.8-27.6-22.1-15.2
Trade Balance (USD billion)-189.5-136.6-137.5-117.8-105.7
Exports (USD billion)300314311262275
Imports (USD billion)490451448380380
Exports (annual variation in %)-1.94.6-1.2-15.74.9
Imports (annual variation in %)0.1-8.0-0.6-15.30.2
International Reserves (USD)293304341356373
External Debt (% of GDP)22.524.023.323.3-  

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India Facts

Bond Yield6.73-0.03 %Oct 16
Exchange Rate64.700.0 %Oct 16
Stock Market32,6340.62 %Oct 16

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India Economic Growth

September 19, 2017

FocusEconomics panelists downgraded their view of the economy this month following a lackluster first quarter of FY 2017. The panel sees GDP expanding 7.0% in FY 2017, which is down 0.2 percentage points from last month’s forecast. However, activity should pick up in H2 FY 2017 as the economy moves past demonetization and the GST implementation. Growth is projected to accelerate to 7.4% in FY 2018.

India Economic News

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